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Cable companies, thanks to their faster broadband offerings, are zooming ahead of their phone company rivals. Phone companies are losing DSL customers faster than they are gaining subscribers for their faster broadband offerings, a problem that continues to get worse with every passing quarter. During the second quarter of 2012, cable companies took a 140 percent share of broadband flow during the quarter, according to UBS Research telecom analyst John Hodulik. In the April-to-June 2012 time period, AT&T (s T) and Verizon (s VZ) lost 94,000 broadband subscribers in total.

The news isn’t all that bad. For example, Verizon continues to add subscribers for its fiber broadband service FiOS. It added 134,000 net subscribers in the second quarter of 2012, down from 189,000 it added in Q2 2011. It lost 132,000 DSL subscribers in Q2 2012. AT&T added 553,000 net subscribers for its U-Verse High Speed Internet but lost 649,000 DSL subscribers.

In the end, phone companies added 687,000 higher-speed broadband customers but lost 781,000 DSL customers. So in order for AT&T and Verizon to keep fighting cable, it is pretty clear: they need to keep offering better broadband services and higher speed packages.

“We estimate that cable added 240K subscribers in 2Q while the total broadband market only added 172k subscribers,” writes Hodulik in a note to his clients. “Given slowing industry subscriber growth, the Bells’ maturing fiber initiatives, VZ’s new DSL policies, and recent price initiatives, we believe this trend could continue and expect the telcos as a group to lose subs in 2H12 and 2013.”

In addition to the broadband losses, the two phone giants lost 720,000 residential voice lines during the quarter, down from 839,000 voice subscribers they lost during the same three months of 2011. On the upside, they added 275,000 video subscribers, though that is less than 368,000 subscribers they added during the same three months last year.