Montenegro’s information and communications technology sector recorded a sharp improvement in financial performance during 2025, with aggregate profit rising 93 per cent, revenue increasing 12 per cent and employment expanding 14 per cent, even as the number of companies included in the sector declined by 19 per cent.
The results, presented on 24 July 2026 by the Chamber of Economy of Montenegro and industry association ICT Cortex, reinforce technology’s growing importance to a small economy still heavily dependent on tourism, construction, property investment and imported goods. They also reveal a sector becoming more concentrated, more labour-intensive and considerably more profitable.
Computer programming remains the largest ICT activity by number of companies and employees. Telecommunications, however, continues to dominate the financial results: operators represent only 4 per cent of ICT companies but generate more than half of total sector revenue.
This distinction matters. Montenegro is developing an increasingly active software and digital-services community, but the largest share of ICT turnover still comes from capital-intensive, regulated telecom businesses with established subscriber bases, network assets and comparatively predictable cash flows. The sector’s near-doubling of profit cannot therefore be interpreted automatically as a broad-based acceleration across every software developer and technology start-up.
The analysis was prepared from company financial statements using an updated methodology aligned with the revised classification of economic activities and OECD standards. This should improve future international comparisons, although the methodological change also requires caution when comparing the latest absolute numbers with earlier sector studies.
A smaller company base is generating substantially more profit
The combination of fewer businesses and stronger aggregate performance implies a significant increase in average corporate scale.
With sector revenue up 12 per cent and the number of companies down 19 per cent, average revenue per company increased mechanically by approximately 38 per cent. Employment per company rose by about 41 per cent, while average profit per company more than doubled, increasing by approximately 138 per cent.
Profitability strengthened much faster than turnover. Aggregate profit grew 93 per cent against revenue growth of 12 per cent, indicating that the sector’s profit margin increased by roughly 72 per cent relative to its 2024 level.
The improvement may reflect operating leverage, better utilisation of telecom infrastructure, higher-value software contracts, stronger digital-service exports or the exit of smaller loss-making businesses. It may also include company-specific factors such as asset sales, financing income, tax effects or other non-recurring items. A full assessment requires a breakdown between operating profit, EBITDA, net profit and exceptional gains.
The reported decline in company numbers should also be interpreted carefully. It may represent closures and consolidation, but part may arise from the revised classification methodology. Montenegro experienced a rapid increase in technology-related company registrations after 2020, supported by foreign professionals, remote workers and businesses relocating from Russia, Ukraine and other markets. Some of those entities had little operating activity or functioned principally as legal vehicles for individual contractors.
A reduction in inactive or marginal companies would improve average sector performance without weakening the commercial core. A fall caused by the departure of viable exporters would carry a different implication. The published headline figures do not yet separate reclassification, liquidation, merger and relocation effects.
Earlier sector analysis placed Montenegro’s wider ICT company population at 2,646 businesses in 2024, compared with 970 in 2020. Employment increased from 4,441 to 8,605 people over the same period, while revenue rose from €376.1 million to €683.8 million and reported profit from €36.1 million to approximately €89.2 million.
Applying the latest annual growth rates mechanically to those 2024 values would imply 2025 revenue of around €766 million, employment approaching 9,800 and profit above €170 million. Those calculations should not be treated as official 2025 totals because the new analysis uses a revised activity classification. They nevertheless indicate the possible scale of the industry within an economy whose annual output remains below €10 billion.
Telecommunications still determines the sector’s financial weight
The revenue concentration in telecommunications means Montenegro’s ICT performance remains closely connected to Mtel, Crnogorski Telekom and One Crna Gora.
The three operators generated combined profit of more than €33 million in 2024, supported by recurring mobile, broadband, television and enterprise-service revenue. They also maintain the largest physical investment programmes within the digital economy.
Electronic-communications operators invested €80.87 million during 2024, an increase of 5.99 per cent from the preceding year. Sector plans envisaged approximately €63 million of investment in 2025, followed by more than €53 million in 2026 and around €49 million in 2027. Investment over the previous decade exceeded €755 million.
That capital base produces financial characteristics very different from those of a software studio or early-stage technology company. Telecom operators own spectrum rights, fibre networks, base stations, data infrastructure and customer contracts. Their depreciation charges and financing requirements are higher, but so are their barriers to entry and capacity to generate recurring cash.
Crnogorski Telekom, majority owned by Hrvatski Telekom and ultimately linked to Deutsche Telekom, continued to report revenue and profitability growth during the first quarter of 2026. Revenue increased 4.6 per cent, EBITDA rose 3.5 per cent and net profit reached approximately €1.9 million. The operator reported more than 155,000 households covered by fibre and continued investment in 5G and fixed-network infrastructure.
The strong results of large operators can disproportionately affect the aggregate ICT figures. A modest margin improvement across businesses producing more than half the sector’s revenue can add more absolute profit than rapid expansion across hundreds of small software companies.
This is not a weakness in itself. Telecom networks are essential economic infrastructure and provide the connectivity required by cloud services, digital government, tourism platforms and remote exporters. It does mean that policymakers should distinguish between telecommunications, computer programming, equipment distribution, digital advertising and other ICT services when designing incentives.
A general ICT support programme may direct money towards activities that already possess mature balance sheets while failing to solve the financing constraints of product companies without physical collateral.
Programming creates employment but still needs proprietary products
Computer programming remains the sector’s principal source of company formation and skilled employment. The 14 per cent increase in total ICT employment indicates that the 2025 improvement was not achieved only through cost cutting or workforce reduction.
Employment nevertheless grew slightly faster than revenue. On the published growth rates, revenue per employee declined by approximately 1.8 per cent, while profit per employee increased by about 69 per cent.
This unusual combination suggests that sector margins benefited from factors other than straightforward labour productivity. Possible explanations include higher telecom profitability, lower depreciation or financing charges, corporate restructuring and one-off gains. It could also reflect a shift from externally purchased services towards employees, reducing non-payroll costs while increasing headcount.
Montenegro’s software sector has expanded through outsourcing, custom development, digital marketing, fintech, gaming and services provided to foreign clients. Companies such as Logate, Amplitudo, Čikom, Coinis, Uhura Solutions and Five Group illustrate the range of domestic capabilities, from enterprise software and telecommunications solutions to artificial intelligence and digital services.
The next stage of development requires a larger share of proprietary products and recurring intellectual-property revenue. Outsourcing can generate exports and well-paid employment, but it remains exposed to wage competition from Serbia, North Macedonia, Bosnia and Herzegovina, Romania, Bulgaria, Türkiye and Asian markets.
A company selling its own software platform can scale revenue without increasing employment at the same rate. It can also attract equity investment based on recurring subscriptions, customer retention and intellectual property rather than hourly billing. Product development is more difficult to finance because expenditure comes before revenue and conventional Montenegrin banks generally prefer property, equipment or receivables as collateral.
The 2025 figures show an industry capable of generating profit, but they do not establish how much is being reinvested in research and development. High reported earnings can coexist with limited innovation where companies distribute profits or concentrate on mature service contracts.
Public support is moving towards ICT, but allocation will determine its value
Montenegro’s Smart Specialisation Strategy for 2026–2031 has placed ICT in a stronger policy position. In addition to its horizontal function across the economy, technology is now recognised as a separate vertical driver of development.
Almost 40 per cent of the funding planned during the strategy’s first two years is intended for ICT and horizontal digital-transformation measures. The amount is potentially significant for Montenegro’s relatively small technology market, although its economic effect will depend on the final action plans, beneficiary criteria and disbursement timetable.
Public funding should distinguish among infrastructure, company digitalisation, research, export development, workforce training and direct support for software products. These uses have different risk profiles and produce different economic returns.
Subsidising established companies to purchase standard hardware may raise domestic ICT turnover without creating exportable intellectual property. Co-financing product development, cybersecurity certification, cloud infrastructure, patents, customer qualification and entry into EU markets can create a more durable revenue base, but it also carries a higher probability of failure.
Montenegrin companies can supplement national programmes with EU and regional financial instruments. The Western Balkans Investment Framework provides access to guarantees, investment grants, technical assistance and advisory support through initiatives including the Enterprise Expansion Fund, Innovation and Green Transformation Facility, Single Market Ready Programme and EFSD+ guarantees.
The wider Go Digital in the Western Balkans programme, supported by the European Bank for Reconstruction and Development and the European Union, has a regional envelope of approximately €377 million. It combines bank lending, grants and technical assistance for automation, digitalisation and green technologies.
These facilities can help established small and medium-sized enterprises invest in digital equipment and production systems. They are less suited to pre-revenue software start-ups that need risk capital rather than amortising bank debt. Montenegro still lacks a deep domestic venture-capital and business-angel market capable of financing companies from prototype through international commercialisation.
The reported 93 per cent profit increase may strengthen the sector’s standing with banks, but credit decisions remain company-specific. Aggregate profitability offers limited security to a start-up without stable contracts, tangible assets or predictable cash flow.
Regional concentration remains pronounced
Most ICT companies and employees remain concentrated in Podgorica and the coastal municipalities, while northern Montenegro has only a limited technology base.
Digital businesses are theoretically less dependent on location than tourism, industry or logistics. In practice, they cluster around universities, skilled labour, international connections, professional services and communities of founders and developers.
Expanding activity into Nikšić, Bijelo Polje, Berane and other northern centres requires more than grants for company registration. It depends on high-quality broadband, suitable office space, technical education, mentoring, English-language skills and access to customers.
Remote work can reduce the importance of physical distance, but junior employees still benefit from working inside larger teams. A policy focused only on attracting individual remote professionals may increase apartment demand and consumption without creating lasting local companies or intellectual property.
The University of Montenegro, Science and Technology Park, Innovation Fund, Tehnopolis and ICT Cortex can provide the institutional base for a more distributed ecosystem. Their programmes will need measurable commercial outcomes, including exported products, private co-investment, retained employment and repeat customers.
Artificial intelligence changes the entry-level labour market
The sector’s continued employment growth is positive, but companies have warned that junior programmers may find it increasingly difficult to secure their first positions as artificial intelligence automates basic coding, testing and documentation.
This creates a contradiction for education policy. Montenegro needs more experienced engineers, data specialists and cybersecurity professionals, yet the traditional route through entry-level software work is becoming narrower.
Subsidised placements for IT students could help companies absorb the training cost. Such programmes should be tied to structured mentoring, technical competencies and minimum employment periods rather than functioning as short-term wage subsidies.
Universities will also need to move beyond teaching programming syntax. Employers increasingly require system architecture, data engineering, cloud operations, cybersecurity, industrial applications and the ability to integrate AI tools into controlled business processes.
Montenegro is preparing a national artificial-intelligence strategy, which could open new opportunities for companies. The immediate commercial market is likely to come from tourism, banking, telecommunications, energy, public administration and property management rather than from stand-alone frontier-model development.
The country’s small size makes it a possible testing ground for digital public services and regulated applications. It also limits the domestic customer base, requiring successful companies to design for international markets from an early stage.
Better financial reporting is becoming a competitive requirement
The improved ICT methodology is more than a statistical exercise. Investors, banks and public institutions need clearer separation between telecom infrastructure, software exports, equipment sales, marketing services and newly registered microbusinesses.
An industry described as contributing a large share of national output can appear substantially smaller when only locally retained value added is measured. Hardware resale and telecom turnover may create significant revenue while imported equipment, licences and services reduce domestic value added. Software exports may have lower turnover but retain a larger share through wages, profit and intellectual property.
The latest analysis provides a stronger starting point, but further reporting should disclose absolute revenue, EBITDA, net profit, exports, wages, investment and employment by activity. It should also identify the extent to which results are concentrated among the largest companies and influenced by foreign-owned entities.
Companies themselves face tighter accounting and tax requirements as they mature. Technology businesses commonly mix software development, intellectual-property licensing, consulting, related-party services and foreign customer contracts. Poor documentation can create transfer-pricing, VAT, withholding-tax and revenue-recognition risks even when the underlying company is commercially successful.
The 93 per cent increase in aggregate profit gives Montenegro’s ICT sector stronger economic credibility. Its quality will be judged by the portion generated from recurring operations, exports and proprietary technology rather than reclassification or isolated telecom gains. The sector is already becoming larger and more concentrated; the next investment cycle must turn that scale into software ownership, export capacity and durable high-value employment.
