Albania’s telecom market has potential for further development. Although the penetration rates in the fixed-line and broadband sectors remains low by European standards, the use of mobile phones is widespread in the country, partly compensating a deficient fixed-line infrastructure. The telecoms sector has greatly benefited from closer ties to the European Union in recent years due to more strict regulations and injection of EU funds to modernize infrastructure. Three companies struggle to win market share but the incumbent Albtelecom is still the dominant player. The Electronic and Postal Communications Authority (AKEP) is the regulatory body in the field of electronic communications and postal service, which supervises the regulatory framework defined by the law on electronic communications.
Since 2014, Albania’s economy has steadily improved and economic growth reached 3.8% in 2017. However, close trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of possible debt crises and weak growth in the euro zone. Complex tax codes and licensing requirements, a weak judicial system, endemic corruption, poor enforcement of contracts and property issues, and antiquated infrastructure contribute to Albania’s poor business environment making attracting foreign investment difficult. Since 2015, Albania has launched an ambitious program to increase tax compliance and bring more businesses into the formal economy.
Albania’s electricity supply is uneven despite upgraded transmission capacities with neighboring countries. However, the government has recently taken steps to stem non-technical losses and has begun to upgrade the distribution grid. Better enforcement of electricity contracts has improved the financial viability of the sector, decreasing its reliance on budget support. Also, with help from international donors, the government is taking steps to improve the poor road and rail networks, a long standing barrier to sustained economic growth.