Why has lifting ban on iPhone shaken Iran's mobile market?

Iran's government has lifted a two-year ban on iPhone registration to permit legal imports, yet the decision to maintain high tariffs has raised doubts about its motives.

Critics say the current 96 percent tariff, which President Ebrahim Raisi's government imposed in 2022 on all handsets worth 600 Euros or more, can earn Masoud Pezeshkian’s government tens of millions of dollars so the decision to lift the ban was only made to help reduce the budget deficit.

If the government decides not to lower the high tariffs, it will make more money from the sale of every iPhone than Apple which makes the phones, they say. One comment on social media said when you buy an expensive mobile phone, you also buy one for the government.

The Minister of Telecommunications Sattar Hashemi announced the decision to lift the ban on registration of new models of iPhones (14 and above) in an X post Wednesday.

Ebrahim Raisi’s government banned the registration of iPhones 14 and above in 2022 and began cracking down on retailers that sold these models. The decision immediately pushed up the price of iPhone 13 on which mobile operators were still allowed to activate SIM cards.

Iranian media say huge numbers rushed to Divar, an online marketplace similar to eBay, immediately after the minister’s announcement Wednesday to sell their iPhone 13s. This model had been more expensive than the banned higher models in the past two years and its price can hugely drop if newer models become available. 

Hardliners are opposed to iPhone imports mainly because Iran's Supreme Leader Ali Khamenei slammed Hassan Rouhani's government in August 2020 for allocating foreign currency to import “a certain luxury American mobile phone”.

Some also allege that using iPhones means providing Iranians' private information and data to an American company (Apple) and eventually the American government. This could have been one reason why Khamenei suggested banning iPhone imports. However, smuggles high-price models always trickled in.

The Pezeshkian government’s decision to lift the import ban initially created a wave of optimism in the Iranian mobile phone market, sparking quite a stir on Persian-language social media among iPhone enthusiasts and among around a million who own iPhones 14 and above who have been unable to register their phones and buy SIM cards in the past two years.

Many saw the lifting of the ban on iPhone imports as an achievement for Pezeshkian's government and a prelude to the lifting of internet filtering, one of Pezeshkian’s top campaign promises. He has so far failed to make the promise true due to the huge resistance of other state bodies involved in the matter.

“Lifting the ban on iPhone [imports] is an important and promising step toward removal of bigger restrictions. People's trust in the government's [abidance by its] promises to fix filtering will increase with this move,” the moderate conservative Asr-e Iran news website wrote immediately after the minister announced that the ban had been lifted.

The optimism, however, gave way to disappointment a few hours later when a government announcement revealed that the Raisi government's 96 percent import tariff on mobile phones worth 600 Euro and more would still apply.

Government Spokeswoman Fatemeh Mohajerani soon reacted to the criticisms on X to calm the market. She stated that a mistake had occurred about the tariffs and that a decision was to be made and announced in the coming days.

Registration of all imported mobile phones on a government portal was made compulsory in 2019 by the government of Hassan Rouhani which said the plan was adopted to stop the sales of contraband handsets.

This meant that the International Mobile Equipment Identity (IMEI) of all imported devices, or those brought into the country by their owners from abroad, had to be registered to allow sim card activation by mobile operators.