Iran's digital economy battered by prolonged blackout

The disruption has cut off companies that depend on global connectivity, from e-commerce retailers to freelance service providers.

With access largely limited to domestic platforms, many users cannot reach essential global tools such as search engines, email services and widely used social media networks.

Iran’s digital economy accounts for an estimated 5% to 6% of the country’s gross domestic product, underscoring the scale of the impact.

According to Communications Minister Sattar Hashemi, the shutdown is costing more than $35 million per day—roughly $1.5 billion since the start of the conflict.

Independent estimates suggest the losses may be even higher. Afshin Kolahi, a representative of Iran’s Chamber of Commerce, has said the total daily economic damage, including indirect effects, could reach $80 million.

Officials say the restrictions are necessary to counter cyberattacks targeting government infrastructure. Many Iranians, however, believe the shutdown is also intended to make it harder for protests to spread.

‘Completely bankrupt’

Many small businesses have shut down or are close to collapse, while millions of workers have been partially or entirely pushed out of the economic cycle.

Entrepreneurs who once relied on platforms such as Instagram, Telegram and WhatsApp to reach customers have been cut off for more than six weeks. For many, rebuilding on domestic platforms feels like starting from scratch.

The challenge is particularly severe for businesses whose websites are hosted abroad. With only domestic domains widely accessible, many companies have lost access not only to customers but also to backend systems and data.

The disruption has also hit home-based producers, many of them women, who rely heavily on social media to market their products. Many had already lost customers during the 12-day war in June and the unrest earlier this year.

Some entrepreneurs say the shutdown has wiped out their income.

Amir, a YouTube podcaster, wrote that his income from YouTube, Instagram and other platforms had dropped to zero.

“I am completely bankrupt,” he said. “I can’t pay my loan installments and have to sell my equipment.”

Another user who runs an embroidery workshop said the shutdown forced layoffs.

“Until forty-something days ago, I had 37 employees. Now I’ve only been able to keep five.”

Costly workarounds

In response to mounting pressure, authorities have introduced a limited system known as “professional internet”.

Under the program, business owners can apply for unfiltered internet access via their SIM cards by submitting documentation and paying a higher fee. The access, however, applies only to the individual subscriber and does not extend to customers.

Critics say the measure does little to help businesses whose clients remain offline.

“They still don’t understand that for these businesses to function, their customers also need internet access,” one user wrote.

Some rely on VPNs, satellite services such as Starlink, or roaming through foreign SIM cards. These workarounds often come at a high cost, forcing households to reprioritize spending.

“I cut down on everything else just to stay connected,” one user wrote on social media, describing internet access as essential not only for business but also for staying informed.

Enforcement against attempts to bypass restrictions has intensified. Text messages sent to users warn that unauthorized access to the international internet—through VPNs or proxy services—violates cybercrime laws and could lead to prosecution.

An underground market for VPN services has flourished on domestic platforms, often with high prices tied to data usage. Reports of fraud are also common, with users saying they paid for access that never worked.

Access has been selectively granted through a “whitelist” system covering certain media outlets, companies and universities, creating uneven levels of connectivity across sectors.

Authorities have also stepped up efforts to confiscate satellite equipment used to access services such as Starlink, further narrowing the few remaining pathways to the global internet.