Although this increase is below the general inflation rate, it remains a heavy burden for households already under financial pressure. This rise is not simply an economic adjustment; it reflects a deep and long-standing imbalance in the country’s telecommunications industry — a sector that has long struggled with the gap between dollar-denominated costs and rial-based revenues, reduced investment, and an aging network.
Vicious Cycle of Price and Quality
Operators have repeatedly stated that the costs of developing and maintaining networks are largely in foreign currency, while their revenues are in rials. This gap limits their ability to invest in network upgrades and new technologies. Meanwhile, consumers continue to receive subpar service, so any price adjustment, even a modest one, without sufficient transparency is perceived as a one-sided burden.
Statistics show that from 2017 (1396 in the Iranian calendar) to today, mobile internet tariffs have increased only 1.6 times, while household incomes have risen roughly 13-fold and the prices of essential goods over 20-fold, according to economic analysis centers. This large discrepancy indicates that tariff increases are not only overdue but also necessary to sustain the network.
Some experts note that Iran’s telecommunications economic model over the past two decades has been based on “low pricing,” which initially worked during rapid subscriber growth. But from the mid-2010s, with surging equipment costs, sanctions, and the need to expand networks, this model became unsustainable. Reduced investment led to falling service quality, which in turn discouraged regulators from adjusting tariffs — while frozen tariffs further hindered quality improvements. Today, this vicious cycle has become a structural crisis, with operators and regulators each blaming the other for the current situation.
Tariff stability has worsened equipment aging, reduced service capacity, and lowered quality. Meanwhile, sanctions and currency fluctuations have caused equipment costs to exceed global prices by 10 to, in some cases, 20 percent. As a result, the network is not only unable to expand, but the deployment of advanced technologies like 5G has either stalled or slowed. IT market participants argue that a 20 percent tariff increase only partially addresses financial shortfalls and alone will not drive network development.
Lack of Transparency and Public Trust
But this is only one side of the story — the supply side. The other concerns the public as consumers. Surveys indicate widespread dissatisfaction with internet services. A key reason for public mistrust is the lack of a clear relationship between price, quality, and investment. In many countries, internet price hikes are accompanied by announcements of development plans and quality indicators. In Iran, however, operators provide no transparent reports, and the regulator does not link tariff increases to service improvements. As a result, users view price hikes as unilateral decisions without guarantees for network development.
n a high-inflation, volatile currency environment, rational tariff adjustments are inevitable. These adjustments should be gradual, transparent, and aligned with people’s financial capacity. The government and regulators must clearly communicate details of tariff increases, the differences between domestic and international traffic, and various internet packages. Simultaneously, operators should provide concrete plans for network development and maintenance to ensure users receive acceptable service quality for the costs they pay.
The Future of Iran’s Telecommunications Industry Could Follow Three Scenarios:
Continuing the current trend with gradual tariff increases, which will not improve network quality but merely maintain it in a fragile state.
Implementing substantial tariff increases along with binding commitments to improve quality and develop the network — a challenging path that could restructure the industry.
Sustaining economic pressure while investment stagnates, leading to severe service deterioration, network capacity failures, and user migration to alternative internet solutions like VPNs.
The 20 percent rise in mobile internet tariffs is more than a simple price adjustment; it symbolizes the structural crisis of Iran’s telecommunications industry. Rational tariff reforms, accompanied by transparency and a clear network development plan, are the only ways to maintain service quality and sustainability. Without these measures, the network will gradually deteriorate, and the gap between operators’ financial capacity and development needs will continue to widen.
NOURNEWS