Iran is grappling with its most severe and prolonged nationwide internet shutdown, entering a second week of near-total blackout that is crippling an economy already reeling from a catastrophic currency collapse.
Blackout Compounds Economic Despair
Authorities initiated the near-total internet blackout on January 8, following the outbreak of nationwide protests. The unrest, which appears to have been suppressed, began on December 28 after Iran's rial currency plummeted to over 1.4 million to the US dollar. This represents a staggering devaluation from 32,000 to $1 a decade ago and just 70 to $1 before the 1979 Islamic Revolution.
The currency's freefall has sent inflation soaring, drastically increasing the cost of food and essentials. This pressure was intensified by government changes to gasoline prices in December, further stoking public anger.
Businesses Driven to the Brink
The internet outage is delivering a critical blow to enterprises, especially those dependent on digital platforms for survival. One Tehran pet shop owner, speaking anonymously for fear of reprisals, reported a 90% drop in business since the protests began. "Before that, I mainly worked on Instagram and Telegram which I don’t have access to anymore," he said. While the government has proposed domestic alternatives, the core issue remains: "Our customers are not there — they don’t use it."
The financial damage extends beyond small shops. Iran's state-run IRNA news agency quoted deputy communications minister Ehsan Chitsaz stating the internet cut costs Iran $2.8 to $4.3 million daily. However, the internet monitoring group NetBlocks estimates the true daily cost to be over $37 million.
Academic analysis underscores the scale of the digital economy under threat. Dara Conduit of the University of Melbourne noted that in 2021 alone, Iranian businesses generated an estimated $833 million a year in sales via social media. She cited separate estimates that internet disruptions during the 2022 Mahsa Amini protests cost the economy $1.6 billion.
Crackdown Extends to Commercial Spaces
The state's response has also directly targeted commercial entities. The judiciary's Mizan news agency reported that Tehran prosecutors filed to seize assets of 60 cafes allegedly involved in the protests, with plans to target athletes and cinema figures as well. Reports confirm some cafes in Tehran and Shiraz have been forcibly closed.
Beyond the blackout, the violent crackdown and a wave of reported 26,000 arrests have severely dampened consumer sentiment. In Tehran, many shops and restaurants stand open but empty, with customers focusing only on essential groceries. "Those who pass by our shops don’t show any appetite for shopping," lamented an upscale tailor shop owner. "We are just paying our regular expenses... but in return, we don't have anything."
With officials providing no firm timeline for the internet's restoration, and connectivity restored only minimally for some domestic sites, the future for Iran's businesses and economy looks increasingly precarious. The outage, intended to stifle dissent, is now suffocating the nation's commercial lifelines.
