Prolonged Internet outages push Iran’s digital economy to brink
Iran's digital economy has entered a period of structural instability due to prolonged Internet outages, with around 2,000 online companies able to withstand only one to two more months of disruption, according to Reza Olfat-Nasab, head of the Iranian Union of Virtual Businesses.
Speaking to KhabarOnline, Olfat-Nasab said the digital sector has faced a series of consecutive crises over the past year, placing heavy pressure on online businesses. He argued that the situation can no longer be viewed as merely a technical disruption, but must be regarded as a structural issue within the country's economy.
Olfat-Nasab warned of the consequences of continued Internet disruptions, noting that sales at some online businesses have fallen by as much as 70%.
Over the past year, Iran's Internet has been disrupted for more than 100 days, including a record 63 consecutive days of outage during the recent conflict, according to available data. Internet access across the country was largely shut down from the early hours of the February 28 US-Israeli attack, with connectivity dropping to around 2% of pre-war levels, according to monitors. "Since the April 8 ceasefire took effect, authorities have gradually expanded limited access to selected individuals and entities, but most of the country's population of more than 90 million remains offline.”
Abbas Ashtiani, head of the blockchain commission at Iran’s ICT Guild Organization, estimated that the digital blackout imposes at least $30 million to $35 million in daily direct, indirect and opportunity costs on the country. A KhabarOnline report concluded that Iran's economy lost approximately $1.71 billion (300,000 billion tomans) during two months of Internet shutdown.
Olfat-Nasab, addressing estimates of daily losses ranging from $30 million to $80 million due to Internet outages, said that while no official or definitive figures exist on the matter, available assessments point to substantial losses in the sector. He emphasized that more important than the figures themselves is the true nature of the damages, which are often indirect and hidden and rarely captured in official reports.
In a statement on Wednesday, the Tehran E-commerce Association called for the restoration of Internet access, warning that the cutoff has disrupted updates to security equipment and effective responses to cyberattacks. The association added that the market for virtual private network (VPN) services has surged, intensifying insecurity in cyberspace.