DUBAI, United Arab Emirates (AP) — Iranians have been grappling for nearly two weeks with the longest and most comprehensive internet shutdown in the Islamic Republic’s history — one that has not only restricted their access to information and the outside world, but also limited many businesses that rely on online advertising.
Authorities shut down internet access on January 8 as nationwide protests led to a brutal crackdown that activists say has killed more than 4,000 people, with more feared dead. Since then, there has been minimal access to the outside world, with connectivity restored in recent days only to some internal websites. Google also began to function partially as a search engine, with most search results inaccessible.
Officials have offered no firm timeline for the return of the Internet, leading to fears for businesses across the country about their future.
A pet store owner in Tehran, who like others spoke on condition of anonymity for fear of reprisals, said his business had dropped by 90 percent since the protests. “Before that, I worked mainly on Instagram and Telegram, which I no longer have access to. The government proposed two internal alternatives. The point is that our customers are not there – they do not use them.”
The internet outage is the latest pressure on businesses
The internet outage compounds the economic pain already suffered by Iranians. The protests, which appear to have stalled under a bloody crackdown by the authorities, began on December 28 as the Iranian rial fell to more than 1.4 million to $1. Ten years ago, the rial was trading at 32,000 to $1. Before the Islamic Revolution of 1979, it was trading at 70 to $1.
The currency’s downward spiral pushed inflation higher, driving up the cost of food and other daily necessities. The pressure on Iranians’ pockets has been compounded by changes to petrol prices, which were also introduced in December, fueling further anger.
Iran’s state news agency IRNA quoted a deputy minister of communications and information technology, Ehsan Chitsaz, as saying the internet shutdown was costing Iran between $2.8 million and $4.3 million every day.
But the true cost to the Iranian economy could be much higher. Internet monitoring organization NetBlocks estimates that each day of Internet shutdowns in Iran costs the country more than $37 million.
The site says it estimates the economic impact of internet outages based on indicators from several sources, including the World Bank and the International Telecommunication Union, which is the United Nations’ specialized agency for digital technology.
In 2021 alone, a government estimate suggested that Iranian businesses made up to $833 million a year in sales from social media sites, wrote Dara Conduit, a lecturer at the University of Melbourne in Australia, in an article published by the journal Democratization in June. She cited a separate estimate suggesting that internet outages around the 2022 Mahsa Amini protests cost the Iranian economy $1.6 billion.
“The far-reaching and far-reaching economic consequences of the 2022 internet outages risked further escalating tensions in Iran and fueling the mobilization of new anti-regime cohorts on the streets at a time when the regime was already facing one of the gravest existential threats of its lifetime,” Conduit wrote.
More than 500 people were killed during that crackdown and more than 22,000 were detained.
Prosecutors are targeting some businesses because of their support for the protests
Meanwhile, prosecutors also began targeting some businesses in the crackdown.
The judiciary’s Mizan news agency reported on Tuesday that prosecutors in Tehran had filed documents to seize the assets of 60 cafes it alleged had a role in the protests. It also announced plans to search the assets of athletes, movie personalities and others. Some cafes in Tehran and Shiraz have been closed by authorities, other reports say.
Internet discounts generate more outrage
The financial damage is causing some people to openly discuss the internet outage.
In the comments section of an online news story carried by the semi-official Fars news agency, which is believed to be close to the country’s paramilitary Revolutionary Guard, one reader wrote: “For God’s sake, please don’t let this internet cutting become commonplace. We need the net. Our business life is disappearing. Our business is being destroyed.”
Another commenter wondered why the internet remained down after days of no reported street protests.
It’s not just internet outages that hurt businesses. The violent crackdown on protests and the wave of 26,000 reported arrests that followed also dampened consumer sentiment.
In Iran’s capital, many shops and restaurants are open, but many appear empty as customers focus primarily on food and little else.
“Those who pass by our stores show no appetite for shopping at all,” said the owner of a luxury tailor shop in Tehran. “We only pay our regular expenses, electricity and staff… but in return we have nothing.”