Tehran is reportedly exploring the possibility of charging for undersea fibre-optic cables routed through the Strait of Hormuz, potentially creating a lucrative new income stream and giving Iran added leverage against adversaries abroad.
According to an announcement carried by the Iranian Revolutionary Guard-linked Tasnim News Agency, Iran plans to impose “transit fees” on international groups responsible for the undersea cables.
Firms including Google, Meta, Microsoft and Amazon would reportedly have to operate within Tehran's regulatory framework.
“We will impose fees on internet cables,” Iranian military spokesperson Ebrahim Zolfaghari posted on X last week.
The plan would likely hand Tehran the ability to keep a closer watch on data transmitted through the cables. Around seven major submarine cable routes currently cross the Strait of Hormuz, with the majority positioned near Omani territorial waters.
Among the subsea systems crossing the strait are FALCON, Gulf Bridge International (GBI) and Gulf-TGN, all of which provide connectivity to Gulf states and traverse Iranian territorial waters. The cables form part of a wider network connecting data centres across Asia, Europe and the Middle East.
These undersea links are essential to global digital infrastructure, enabling everything from internet services and cloud operations to financial transactions and defence communications. They also carry significant corporate traffic between Europe, India, Asia and Gulf economies, cementing the strait's role as a major digital corridor.
According to CNN, Tehran has not explicitly stated that it intends to target the subsea cables, despite having the means to disrupt them. Analysts say a combination of military divers, small submarines and drones could place the networks under genuine threat.
Another source of concern is the presence of Iran-backed militias in the region, which could pose a threat to critical cable infrastructure. In 2024, three subsea cables were damaged when Yemen's Houthi militants reportedly used a ship's anchor to sever the lines.
The attack resulted in a 25% reduction in internet traffic across the region, sparking significant disruption. Despite this, the impact on the wider global network remained limited, given that the region handles only a small share, around 1%, of worldwide internet bandwidth.
The plan would effectively establish a form of digital toll system, requiring subsea cable operators crossing Iranian waters or nearby routes to pay fees to maintain uninterrupted operations. Observers have likened the idea to the Suez Canal, a major source of revenue for Egypt through maritime transit charges.
“Of course, for existing cables, Iran has to abide by the contract that had been made when the cable was laid,” Irini Papanicolopulu, a professor of international law at SOAS University of London, told CNN.
“But for new ones, any state, including Iran, can decide if and under what conditions cables can be laid in its territorial sea,” she added.
The proposal may ultimately prove difficult to enforce, given that international maritime regulations offer protections for key transit routes. Strategic straits used for global shipping and communications are covered by longstanding international agreements.
Submarine cable infrastructure also benefits from legal safeguards tied to freedom of navigation and communications, meaning Iran would face significant legal obstacles in attempting to impose the proposed controls.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.