Internet shutdown squeezes Iran’s ailing businesses amid protests, currency slide

Iran’s longest and most sweeping internet shutdown has compounded economic distress for businesses already battered by a plunging currency and weeks of unrest, with traders warning of sharp revenue losses and no clear timeline for restoration of services.

Authorities cut nationwide internet access on 8 January amid protests that triggered a harsh crackdown. Since then, access to the outside world has been severely restricted, with limited connectivity restored only for some domestic websites. Even basic online functions remain constrained; Google has partially functioned as a search engine, though most results remain inaccessible.

Officials have not provided a firm timeline for a full restoration, heightening uncertainty across sectors that rely on online advertising and social media. A pet shop owner in Tehran, speaking on condition of anonymity, said business had fallen by 90% since the shutdown. “Before this, I mainly worked on Instagram and Telegram, which I can’t access anymore. The government has proposed two domestic alternatives, but our customers aren’t there,” he said.

The blackout has amplified pain from the collapsing rial. The protests began on 28 December after the currency slid to over 1.4 million to the dollar. A decade ago, the rial traded at about 32,000 to the dollar; before the 1979 Islamic Revolution, it was around 70 to the dollar. The depreciation has driven inflation, pushing up prices of food and daily essentials. Changes to gasoline prices introduced in December further fuelled public anger.

Iran’s state-run IRNA quoted a deputy minister of communications and information technology, Ehsan Chitsaz, as saying the internet cut has cost Iran between $2.8 million and $4.3 million per day. Independent estimates are higher. Internet monitoring group NetBlocks estimates each day of a shutdown costs Iran more than $37 million, based on indicators from sources including the World Bank and the International Telecommunication Union.

Academic research underscores the scale of the impact. Writing in the journal Democratisation, University of Melbourne lecturer Dara Conduit cited estimates that Iranian businesses generated up to $833 million annually from social media sales in 2021. She also noted that internet disruptions during the 2022 Mahsa Amini protests cost the economy an estimated $1.6 billion, warning that blanket shutdowns risk widening opposition by inflicting broad economic harm.

The current clampdown extends beyond connectivity. Iran’s judiciary has begun targeting businesses it alleges were linked to protests. The judiciary’s Mizan news agency reported that prosecutors in Tehran moved to seize assets of 60 cafes, with plans to pursue assets of athletes, cinema figures and others. Media reports say some cafes in Tehran and Shiraz have been shut.

Public frustration has surfaced even on semi-official platforms. In comments on a report by the Fars news agency, which is considered close to the Revolutionary Guard, one reader urged authorities not to normalise internet cuts, warning that “our business life is vanishing”. Another questioned why restrictions remained after days without reported street protests.

Beyond the blackout, the crackdown itself has dampened consumer sentiment. Shops and restaurants in Tehran remain open but are largely empty, as households prioritise groceries over discretionary spending. “People pass by without any appetite for shopping,” said the owner of an upscale tailor shop. “We’re paying electricity and staff, but we’re not earning.”

Iranian officials say restrictions were imposed to curb unrest, but business owners argue the prolonged shutdown risks lasting damage to livelihoods and confidence. With inflation elevated, arrests reported in the tens of thousands and connectivity still constrained, traders say the combined shocks threaten survival for many small enterprises unless access is restored soon.