Mobile Internet set to benefit from post-sanctions windfall in Iran

Author: Henrique Barbosa
Published: 2015-09-13

As the Iran nuclear agreement reached in July passed the U.S. Congress challenge, a new era of relations between Iran and the West begins. Following years of tough sanctions, Iran is preparing to deal with a huge economic windfall as they are lifted. The government regains access to billions of previously-blocked dollars in foreign assets, and has new potential markets for its oil and gas exports.

Internet and telecoms should be a priority for the new round of investments, according to the World Bank, but the Iranians have already made a start on this off their own bat. Since hardline President Mahmoud Ahmadinejad finished his term and the more liberal Hassan Rouhani took office in 2013, the mobile Internet has experienced impressive growth in Iran.

The first sign of mobile Internet access opening up came in September 2014 when MCI and MTN Irancell—the two largest telecom operators in the country—received spectrum and authorization to deploy 3G Mobile Broadband. Although officially available in the country since 2009, 3G was the monopoly of Tamin Telecom (Rightel), a former IT supply and solutions company not equipped to scale up 3G nationwide. The end of this monopoly spurred mobile broadband growth. MTN Irancell also received additional spectrum to deploy TD-LTE a few weeks ago.

2015_09-2-graphSource: TechPolis, with data from Telegeography

Rouhani has also defied the powerful Committee to Determine Instances of Criminal Content(CDICC), the country’s de facto Internet censorship bureau. In January this year he overruled CDICC’s order to block WhatsApp. CDICC had previously blocked Facebook and Twitter in the wake of the “Green Movement” protests against the government in 2009. This time Rouhani advised Mahmoud Vaezi, his ICT minister, to leave WhatsApp alone.

While Iran is poised to experience dramatic growth in mobile Internet access, the government has increased cyber-security spending by more than 1200% over the past three years. This was due to attacks such as that by the targeted cyber-weapon Stuxnet, which was alleged in some quarters to have been developed by the US and Israel to sabotage Iran’s nuclear program and Flame, which hit more computers in Iran than anywhere else. But as demonstrated by Turkey, concerns over cyber securitycan very well be transformed into vague reasons to undertake Internet crackdowns. In Iran ICT Minister Vaezi has strongly support SHOMA – Iran’s “National Internet” – and Internet filtering, which is at odds with the movement towards a faster and more open Internet providing citizens freer access to information.

Despite these concerns, the telecoms and Internet outlook for post-sanctions Iran is quite positive. This will be good for the country’s burgeoning tech industry. Better Internet access and fewer obstacles to investment is exactly what Iran needs. If the trend continues, maybe a new Middle Eastern Silicon Valley situated in the foothills of the beautiful Alborz Mountains is not too fanciful a notion.

 

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