Montenegro is often praised for its digital readiness. Mobile penetration is high, broadband coverage is extensive for a country of its size, and digital public services have improved markedly. Yet consumers and businesses consistently report that telecommunications and digital services are expensive relative to income and quality. The explanation lies in the concentrated nature of network ownership and the economics of operating advanced infrastructure in a very small market.
The telecommunications sector is dominated by a small number of operators, with Telekom Crne Gore occupying a central position in fixed-line and broadband infrastructure. While competition exists in mobile services, it is largely retail-based. Infrastructure duplication is limited by geography, population density and capital requirements. As a result, true competition at the network layer is weak.
This structure shapes pricing behaviour. Retail packages may appear competitive on the surface, but average revenue per user remains high relative to wages. Bundling is a key strategy. Broadband, television, mobile services and content are sold together in ways that make comparison difficult and switching costly. Consumers are not overcharged in any single line item, but they pay a premium for the bundle as a whole.
Digital services inherit these costs. Cloud access, data hosting, fintech platforms and e-commerce logistics all depend on reliable, high-capacity connectivity. When wholesale access prices are elevated, downstream digital services price accordingly. For small businesses and startups, connectivity becomes a fixed cost that is difficult to optimise away.
Investment dynamics further entrench this structure. Operators justify pricing through network upgrade cycles, including fibre expansion and 5G deployment. While these investments are real and necessary, their costs are amortised over a limited customer base. In larger markets, scale dilutes capital recovery per user. In Montenegro, each investment euro must be recovered from a small pool of subscribers, reinforcing higher pricing.
The broader economic implication is that digitalisation progresses, but at a higher marginal cost. Montenegro can offer modern digital services, but it cannot offer them cheaply. This constrains the development of data-intensive industries and limits the country’s competitiveness as a digital services hub relative to larger neighbours.
Unless wholesale access is opened more aggressively or regional infrastructure sharing deepens, Montenegro’s telecommunications sector will remain technologically advanced but structurally expensive. The issue is not efficiency, but arithmetic: small markets pay more per connection.
