UPDATE 2-Level 3 second-quarter loss widens; shares fall

* Q2 revenue misses Street view

* Q2 loss/shr of 8 cents beats ests by 1 cent

* Shares fall 20 percent (Adds analyst comments; adds details)

BANGALORE, July 30 (Reuters) - Level 3 Communications Inc's (LVLT.O) quarterly net loss tripled as a weak economy continued to pressure the telecommunications service provider's sales, sending its shares down as much as 17 percent.

The Broomfield, Colorado-based company has been hit hard as its telecom customers are aggressively cutting costs and deferring purchases of network capacity. "The economy continued to be challenging in the second quarter for wireline service providers," Chief Executive James Crowe said in a statement.

The company also reduced its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) expectation to $900 million to $950 million down from prior expectation of a growth from 2008 levels of $988 million.

The results were hurt by a "combination of competitive pricing and difficult business environment based on the slow economy," Piper Jaffray analyst Christopher Larsen said.

The company is seeing pricing pressure in its content delivery network segment from Akamai Technologies Inc (AKAM.O) and others; and on its wholesale business from a number of players, Larsen added.

On Wednesday, Akamai reported second-quarter revenue and an outlook that fell short of Wall Street's expectations, citing pricing pressure.

The Internet content delivery business is getting intensely competitive with new entrants like phone company AT&T Inc (T.N) vying for market share along with older players like Level 3, Akamai and Limelight Network Inc (LLNW.O).

BIGGER LOSS

Second-quarter net loss increased to $134 million, or 8 cents per share, from $42 million, or 3 cents per share, a year earlier. Revenue fell 12 percent to $942 million.

The loss, however, was smaller than analysts' expectation of a loss of 9 cents a share.

Analysts were revenue of $959.4 million, according to Reuters Estimates.

Shares of the company, which have gained 68 percent in last three months, were trading down 17 percent before paring some losses to trade down 12 percent at $1.43. They had closed at $1.62 Wednesday on Nasdaq. (Reporting by Shrutika Verma in Bangalore, Editing by Saumyadeb Chakrabarty)