Iranians Sustain Huge Losses Due To Government Internet Shutdowns

Amid reports that Iranians have lost more than $770 million due to deliberate government internet outages in 2022, authorities try to play down the impact. 

Iranian Minister of Information and Communications Technology Issa Zarepour said Friday that there is no accurate data regarding the damage from internet access restrictions. However, independent VPN review website Top10VPN said in its annual that the economic impact was about $773 million in 2022.

While in dollars this might not appear to be a staggering figure, in local currency it is hundreds of trillions of rials and a huge loss for an economy straddled by US sanctions, inefficiency and corruption.

As nationwide anti-regime protests began in September, the government started to disrupt access to the internet to prevent news about the unrest being disseminated both inside the country and abroad. It also aimed at preventing protesters from communicating with each other. Internet disruption lasted for weeks.

Intermittent disruption have continued in 2023, mostly coinciding with protests. The latest one occurred on March 7, as Iranians were holding a nationwide rally to protest the regime's inaction or possible involvement in the face of poisonous gas attacks on schoolgirls in recent months. 

Drawing widespread criticism on social media, Zarepour, however, rejected the estimates by the company – and any other foreign source for that matter – saying that "there have been dozens of assessments by foreign sources that cannot be relied upon." He added that the Islamic Republic itself has not done any evaluation over the losses caused by the Internet restrictions. 

Earlier in the month, Statista -- an online platform specialized in market and consumer data – said Iran’s blocking access to social media sites and news outlets was second only to Russia in 2022, affecting almost 72 million people

A report released in January said that due to extensive internet and social network restrictions, 20 percent of people lost their online jobs in the last four months of the previous year. According to Jobvision website, 46 percent of organizations suspended or postponed more than half of their recruitment programs due to the recent internet restrictions, and 45% of companies or businesses that depend on the Internet have decided to reduce their payments or had to pay wages by delay.

The computer trade union of Tehran -- or Tehran ICT Guild Organization -- announced in November that almost half of the Internet service providers in had seen a 50-percent drop in sales due to disruptions, censorship, and Internet shutdowns during the protests. The union's secretary Alireza Keshavarz Jamshidian went on to say that about half of the Internet providers lost over 500 million rials (around $1,400) a day, as sales dropped. However, he added, one-fifth of the companies say they suffered between $2,800 and $14,000 loss a day. 

Curfew-style shut down of the internet has a highly damaging impact on several industries including food, medicine, and steel production, especially on small businesses and farmers. The E-Commerce Association in Tehran announced last year that the internet shutdown costs Iran $1.5 million per hour.

Despite all the losses due to the government restrictions, the cash-strapped administration of Ebrahim Raisi has issued a new decree to collect eight percent royalty fee from video call services of mobile operators in the country.