Nigeria's fixed-line telecommunications market segment contracted by 5.3% in the third quarter of 2013 and 23.6% in the 12 months to September 2013.

This is according to Business Monitor International (BMI) research titled "Nigeria Telecommunications Report Q1 2014", which has studied the state of the country's mobile and fixed telecoms services.

In a market where mobile subscription numbers are over 100 million and growing, fixed line services have fast been losing their relevance in Africa’s second largest economy.

According to Nigerian Communications Commission (NCC) monthly subscriber data, the number of active fixed lines as of September 2013 was 362,392.

And telecoms analyst and director at Africa Analysis, Dobek Pater, concurs with BMI that Nigeria's fixed line market has been in rapid decline.

"The fixed line environment services primarily the enterprise market and to an extent the high-end residential market. However, the mobile phone has come to dominate the Nigerian market and most consumers do not even consider trying to subscribe to a landline, relying exclusively on the mobile phone for communications,” Pater told ITWeb Africa.

“Voice price declines have contributed to this decision as the difference in price between fixed and mobile has decreased significantly," Pater said.

Pater noted that there are key reasons for the decline of the fixed line market in that country.

The first is that Nitel, the incumbent fixed line operator, has become defunct in the retail space owing to years of inactivity, while government has been trying to sell it in a number of unsuccessful attempts.

Also, Globacom, the country’s second national operator (SNO), has never deployed a fixed line access network, with the exception of corporate data links, according to Pater.

Thirdly, Pater says private telecommunications operators (PTOs), which are the smaller operators who exist in market niches, struggle to expand owing to limited resources and demand.

Fourthly, Pater adds that code division multiple access (CDMA) operators have traditionally provided the bulk of the fixed lines, using CDMA technology. However, they have been in decline for years because of their inability to effectively compete with GSM operators in the mobile space.

This has affected their overall ability to provide services and build networks, says Pater.

But despite the ‘doom and gloom’ regarding Nigeria’s fixed line market, BMI is upbeat about its future potential.

“BMI believes there are strong growth prospects for next generation fixed network services in the country.

“Some alternative operators, notably Main One, IPNX and MTN, are positioning themselves to take advantage of the emerging opportunities in the fixed network sector by deploying fibre-based infrastructure in business districts and highbrow residential neighbourhoods in major cities, to offer high-value converged services.

“We expect this trend to continue as operators resolve their differences over right-of-way with government authorities at different levels,” BMI has said.