An overview of the ICT industry in Albania

An overview of the ICT industry in Albania

Starting our weekly series of presenting the structure of the ICT sector in various countries around the world , we begin with Albania. We’ll point out some key facts and elements so you can assess if it’s making sense for your company to invest into recruiting resellers, VARs, distributors etc. from the local Albanian market.

First of all, the key facts:

  • With population little over 3 million people and a GDP of $14B it is a market that you would consider relatively small.
  • The IT market is estimated about $190 million, with $66 spending per capita and market growth of 1.4%
  • The ICT Development Index in the previous years, between 2002 – 2010, recorded an extremely high growth of 88%.
  • There are more than 1800 companies and over 8000 professionals that operate in the IT industry.

The ICT industry

The recent world economic crisis didn’t affect much the economic development of the country and its future development is positively evaluated. The financial sector was stable and the small decline from investment withdrawals was balanced from the inflow of savings from returning migrants back to Albania.

The Albanian ICT sector has improved significant in the last 6 years due to the efforts from the local government, donors and businesses. Furthermore, the annual report indicates that the ICT is one of the main development opportunities when doing business in Albania. On the other hand, access to finance, corruption, tax rates and regulation are the main disadvantages when considering in investing in the domestic market and some hurdles you should take under serious thought before engaging in trade with a local representative.

For telecommunication and mobile companies, the advancements over the last years in ICT infrastructure are a great improvement. There are 4 mobile operators with 2 of them offering 3G to their customers and currently operators are preparing to introduce 4G. A couple of years ago the mobile penetration was close to 90% and now it is expected to have surpassed it, being one of the highest rates in the region.

More than half of the population is using the internet and also the e-services offered by the government is quickly growing. Almost 80% of the central  government services are accessible online.

Most of the companies working in the ICT sector in Albania are not specialized in a particular market segment but have two or more activities in their portfolio and operate in a number of sectors and categories. Very few companies are specialized in software development, system integration or hardware distribution alone. There are two main factors why this happens: first, mist companies operate only in the domestic market which brings us to the second factor that it is a small market and so the IT businesses must have a wide range of services or products in order to have strong revenues and be profitable.

Most of the companies decide what products to resell or develop based on their customers’ requirements and they do it often for different fields. These companies within the ICT sector  show strong desire for further development and progress. The majority of the businesses specialize in installation, maintenance and IT supplying, internet services and software designing. As it was stated above, they offer a variety of services for different industries, so a company can have customers from the Travel Industry and the Construction at the same time. That means that they have a significant part of the general development and market growth in Albanian economy.

Percentage of companies servising industry sectors in Albania


Most of the ICT companies are SMEs that in a great percentage work only with local customers with few having exposure to some EU markets. Their quest for new markets will drive the development for new technologies, larger investments in R&D and will also have a positive effect in the management and marketing skills of local talent and will be a driving force for local competition.


The companies

There are about 1800 registered companies that indicate in their incorporation that at least one of their business purpose is IT services. They represent almost 2% of the country’s total number of companies, somewhat 101,000. The vast majority of these IT companies are sole-proprietorships, 1600, and only a small number of them, 190, are registered as limited liability companies and just 7 as joint stock companies. 50% of all companies are located in the capital district of Tirana.

Companies by annual turnover in Albania

A significant 47% has commenced operation in the last 5 years, with about half of them being in business less than 3 years. So, this high rate of new businesses entering the market indicate that the IT sector is not only young but also expanding and this growth in comparison with the overall new business growth, which has varied between negative 2% and 2% in the past 5 years,  in the country is also higher.


Industry analysis

As we noted above, most IT companies operate across different sectors and sometimes there exist companies that are involved in almost every sector. What is especially interesting is that the telecommunication sector followed by public administration and education is the most served sector.

The vast majority of these companies are resellers, VARs, distributors etc., so they import their products from abroad and don’t create proprietary technology. However, they do a lot of localization and customization in order to adapt those products to the local needs, for example, translate into Albanian, use local currency etc. Local small and medium enterprises have already a variety of equipment and programs to choose from that are also affordable. The average annual investment in ICT is about 2.5-3 million USD and all ICT revenues total about 20 million USD. The main projects that currently undergo in the country and the vertical that the local government is focused are e-government, e-health, e-learning and infrastructure initiatives.

Relations with foreign companies


Organizational Structure and management

There is something worth noting in the case of internal structure, the different roles between administrative staff ant technical staff who is involved in the creation and delivery of service and products. Larger companies in general, have a lower percentage of technical staff than micro and small companies, which in turn lack the existence of administrative staff.

About 58% of companies have a marketing department but often they are assigned other responsibilities as well and marketing isn’t their only duty within the company. Of course, small companies don’t even have a marketing department and referrals and networking is their source of new deal registration and clients.


Domestic market coverage

The main business activity is located in the greater area of the capital city, Tirana, and 47% of companies report activity only where their headquarters are and furthermore 70% of the total companies are active in just a few cities. Just 14% operate in national scale and cover the entire country. This phenomenon has its routes mainly in the general domestic economic activity and not due to the weakness of IT companies. 60% of the economic activity or more takes place in the district of Tirana and in the IT sector this number is possibly higher as the IT demand in rural districts is very low. In some fields, such as IT consulting, the demand outside Tirana is insignificant.

Average share of revenue by type of service in IT sector of Albania


Partnerships with foreign companies

About 68% of companies indicate that they have had in the past or still have partnership relation with a foreign company that has no direct end customers there, so they have established a reseller, VAR, distributor etc. partnership. It is common that this type of cooperation happens for specific projects and the distributor type of partnership follows along with local sales partner.

Business activity in Albania


IT companies sell mostly to other businesses, B2B, at a percentage of 57%, and then the public sector follows with about 27%. Non-for-profit companies are insignificant as clients and consumers represent about 14%. Due to this structure, the local government has taken some important steps to indicate the importance of the development of the ICT sector in the country, which in turn will drive the economic growth and have as a result higher living standards for the population.

Distribution of companies by their primary clients in Albania

Exhibitions, Conferences and Events

Below are some noteworthy events that occur yearly and are of interest for ICT companies that want to engage with local businesses, distributors, organizations etc.

  • The International Conference on Network-Based Information Systems
  • ICT Regional Conference and B2B meetings
  • Tech Thursday
  • Albanian ICT Awards


IT News: Sources of Information

“PC World” – no English version available


International Standards

The most important factor that creates a strong barrier for local companies to export their technology is international quality standards. They face many challenges in order to comply with international standards or EU technical requirements that have to be implemented if they want to export their products and increase their position in the international markets. Along with standards, local companies need to recruit more and more specialized and qualified workforce that will lead the efforts to close this gap. Finally, the re-education and continuous training plays a vital role in adapting the latest technologies available and also devoting a large part of resources to that purpose is something Albanian companies have taken in serious consideration.


The SWOT analysis of Albanian ICT sector

We’ll conclude this article with a short analysis of the ICT environment, so companies that are interested in entering the local market can have a concise pros and cons image as well as future possibilities to take into consideration.



– ICT government agencies and associations exist

– IT companies are aware of the fact that they need to implement the international standards and quality metrics for their products

– Labor costs are significantly lower that other countries, especially Western Europe.

– Due to the location, IT companies have a key role and knowledge of the Balknan and Eastern Europe markets.

– The Government has already realized the need of faster ICT development in all sectors of the country and investments are increasing.



It’s not a country that supplies and exports IT products or services

– Most products and services are outdated

– In the telecommunication field, there is a monopoly that leads to high prices with low quality services

– IT companies are not specialized in certain field or vertical but rather have a dispersed clientele

– There is lack of marketing talent and expertise and international strategy

– The size of most companies, sole proprietorship, is a disadvantage for them to expand internationally and so is their budget

– There is a gap in project management skills and production of software

– The available capital to invest in initiatives that will make local products to comply with international standards is very limited

– The accessibility of digital content and the extent of internet usage for business is not as it should be as in other more advanced countries.



– There is an increased understanding for world standard practices and methodologies

– IT companies are more and more competing with regional and international businesses

– The prospect of joining the European Union gives great market potential

– The exposure to foreign IT vendor partners will help the ICT companies to gain in expertise and organizational structure to meet the global standards

– The ICT industry will drive the entire economy and lead into higher living standards; Albania is among the youngest nations in Europe

– The strategic alliances established with foreign companies will increase exports



– There is a fragmentation in representing IT within different industries

– The relatively small market doesn’t allow for great industry development and specialization

–  “Brain Drain” of IT specialists in search of higher salaries abroad



Overall, the Albanian ICT industry is a dynamic and growing sector with important leaps in the recent past. It’s a market that is opening fast, more and more to foreign influence and the potential for international vendors to enter is great. Already, the local market is consisted of resellers, VARs, distributors etc. and the cooperation with foreign vendors is a successful business model. Lastly, the hardware products represent 75% of the local market, the packaged IT 10% and the IT services about 15%.






infographic of IT Companies and Industry in Albania

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