DUBAI, United Arab Emirates (AP) — For nearly two weeks, Iranians have struggled with the longest and most sweeping internet shutdown in the Islamic republic’s history — limiting not only their access to information and the outside world, but also 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 said had killed more than 4,000 people and feared many more. Since then, access to the outside world has been minimal, with only a few domestic sites having restored connectivity in recent days. Google also began to function partially as a search engine, with most search results inaccessible.
Officials have not provided a firm timeline for Internet restoration, leaving businesses across the country worried about the future.
One pet shop owner in Tehran said his business has dropped by 90% since the protests. He, like others, requested anonymity for fear of reprisal. “Before this, I worked mainly on Instagram and Telegram, but now I can no longer use them. The government has proposed two domestic alternatives. The point is that our customers are not there – they do not use them.”
Internet outages are latest pressure on businesses
The internet outage exacerbated the economic pain Iranians were already suffering. The protests, which began on December 28 as the Iranian rial fell to 1.4 million to the dollar, appeared to have ceased amid a bloody crackdown by the authorities. Ten years ago, the rial was trading at 32,000 rials to the dollar. Before the Islamic Revolution in 1979, it traded at 70 to the dollar.
The currency’s downward spiral has pushed up inflation, increasing the cost of food and other daily necessities. The pressure on Iranians’ pockets has been compounded by gasoline price changes introduced in December, further fueling anger.
Iran’s state-run news agency IRNA quoted Deputy Minister of Communications and Information Technology Ehsan Chitsaz as saying that Internet cutoffs cost Iran between 2.8 and 4.3 million U.S. dollars a day.
But the true cost to Iran’s economy is likely to be much higher. Internet monitoring group NetBlocks estimates that Internet shutdowns cost Iran more than $37 million a day.
The website said it estimated the economic impact of internet outages based on indicators from multiple sources including the World Bank and the International Telecommunications Union, the United Nations’ specialized agency responsible for digital technologies.
Dara Conduit, a lecturer at the University of Melbourne in Australia, wrote in an article published in Democracy magazine in June that the government estimated that Iranian businesses would generate as much as $833 million in annual sales through social media sites in 2021 alone. She cited another estimate suggesting that internet outages during the Mahsa Amini protests in 2022 cost the Iranian economy $1.6 billion.
Conduit wrote that the 2022 internet outage “has far-reaching and sweeping economic consequences that threaten to further inflame tensions in Iran and prompt new anti-regime groups to mobilize on the streets, at a time when the regime is already facing one of the most serious existential threats of its lifetime.”
More than 500 people were reportedly killed and more than 22,000 detained during that crackdown.
Prosecutors target some businesses for supporting protests
At the same time, prosecutors also began to target some companies.
The judiciary’s Mizan news agency reported on Tuesday that Tehran prosecutors submitted documents to seize the assets of 60 cafes allegedly involved in the protests. It also announced plans to seek the assets of athletes, movie personalities and others. Other reports said some cafes in Tehran and Shiraz had been closed by authorities.
Internet cuts spark more outrage
The financial losses also have some people openly discussing internet outages.
The semi-official Fars news agency, believed to be close to the country’s paramilitary Revolutionary Guards, carried a report about the internet outage, and in the comments section, one reader wrote: “For the love of God, please don’t let this internet outage become the norm. We need the internet. Our commercial life is disappearing. Our businesses are being destroyed.”
Another commentator questioned why the internet was still blocked after days with no reports of street protests.
It’s not just internet outages that are hurting businesses. A violent crackdown on the protests, followed by a wave of reported arrests of 26,000 people, also dampened consumer sentiment.
Many shops and restaurants were open in the Iranian capital, but many looked deserted as customers focused on groceries and nothing else.
“Those who passed by our store did not show any interest in shopping,” said the owner of a high-end tailor shop in Tehran. “We just pay regular expenses, electricity and staff…but in return we get nothing.”