Identifier
Created
Classification
Origin
03DUBAI2696
2003-06-28 11:34:00
CONFIDENTIAL
Consulate Dubai
Cable title:  

IRANIANS EAGER TO JOIN THE INFORMATION AGE, BUT

Tags:  PGOV PREL PINR IR TC 
pdf how-to read a cable
R 281134Z JUN 03
FM AMCONSUL DUBAI
TO SECSTATE WASHDC 1745
NSC WASHDC 0434
INFO IRAN COLLECTIVE
GCC COLLECTIVE
C O N F I D E N T I A L DUBAI 2696 


E.O. 12958: DECL: 06/27/2013
TAGS: PGOV PREL PINR IR TC
SUBJECT: IRANIANS EAGER TO JOIN THE INFORMATION AGE, BUT
TEHRAN HAS SECOND THOUGHTS

C O N F I D E N T I A L DUBAI 2696


E.O. 12958: DECL: 06/27/2013
TAGS: PGOV PREL PINR IR TC
SUBJECT: IRANIANS EAGER TO JOIN THE INFORMATION AGE, BUT
TEHRAN HAS SECOND THOUGHTS


1. (U) CLASSIFIED BY ACTING CONSUL GENERAL JOHN LANCIA FOR
REASONS 1.5 (B) AND (D).


2. (C) SUMMARY: IRANIAN USE OF THE INTERNET AND CELLULAR
COMMUNICATION IS RAPIDLY EXPANDING AND THE TREND LOOKS SET
TO CONTINUE. CONOFF SPOKE WITH A SOFTWARE ENGINEER AND AN
INTERNET/TELECOM COMPANY OWNER IN MAY ABOUT IRANIAN USE OF
THE INTERNET AND MOBILE PHONES. THEY INDICATED THAT BOTH
BUSINESSES ARE GROWING STEADILY DESPITE IRAN'S POOR
INFRASTRUCTURE. THE REGIME, HOWEVER, MAY BE HAVING SECOND
THOUGHTS ABOUT THE FREE FLOW OF INFORMATION. IN MID-MAY
TEHRAN TOOK MEASURES TO CURTAIL ACCESS TO SOME WEBSITES IT
DEEMS IMMORAL OR THAT DISSEMINATE ANTI-REGIME POLITICAL AND
SOCIAL VIEWS, BUT THEIR EFFORTS MAY PROVE FUTILE. CONOFF
POLLED IRANIAN VISA APPLICANTS IN MAY AND JUNE ABOUT THE
IMPACT OF THE GOVERNMENT FILTERING AND FOUND MOST
INTERVIEWEES' USE OF THE INTERNET UNAFFECTED BY THE NEW
MEASURES. MOST OF THOSE SURVEYED SAID THAT FILTERING MAY
PREVENT THEM FROM LOOKING UP SPECIFIC SITES ASSOCIATED WITH
PROMINENT IRANIAN DISSIDENTS OR PRO-REFORM NEWSPAPERS, BUT
IT WAS HAVING LITTLE IMPACT ON THEIR ABILITY TO GET NEWS
ABOUT CURRENT EVENTS IN IRAN, WHICH FOR THEM WAS MORE
IMPORTANT. END SUMMARY.

--------------
IRANIANS LINING UP TO DIAL UP
--------------


3. (C) URBAN IRANIANS ARE CLAMORING TO BE CONNECTED TO THE
INTERNET AND IRANIAN BUSINESSES ARE STEPPING IN TO MEET THE
RISING DEMAND, ALTHOUGH NOT WITHOUT OBSTACLES. CONOFF SPOKE
WITH A SOFTWARE ENGINEER AND THE OWNER OF A SMALL INTERNET
COMPANY IN TEHRAN IN MAY TO GAIN INSIGHTS INTO IRAN'S LEAP
INTO THE GLOBAL INFORMATION AGE. ACCORDING TO THE U.S.-
TRAINED SOFTWARE ENGINEER, IRAN'S INTERNET SERVICES ARE
DOMINATED BY A HANDFUL OF LARGE COMPANIES, ALTHOUGH A
NUMBER OF SMALL COMPANIES ARE SURVIVING DUE TO SHEER DEMAND
VOLUME. THE ENGINEER SPECIFICALLY MENTIONED PARS ONLINE,
WHICH IS PATTERNED AFTER U.S.-BASED AMERICA ONLINE, AS ONE
OF THE BIGGEST AND MOST RELIABLE PROVIDERS OF INTERNET
SERVICES IN IRAN. THE OWNER OF A SMALL INTERNET COMPANY IN
IRAN SHARED HIS VIEWS ON THE BUSINESS ENVIRONMENT FACING
TELECOM COMPANIES IN IRAN. HE SAID HIS COMPANY WAS ONE OF
HUNDREDS IN TEHRAN THAT WAS SEEKING TO CAPITALIZE ON THE
BOOM IN INTERNET, CELLULAR, AND CALLING CARD SERVICES IN

IRAN. HOWEVER, HE LAMENTED THE LACK OF PRIVATIZATION WITHIN
THE INDUSTRY, FOREIGN COMPETITION WITHIN THE MARKETPLACE,
AND THE SLOW PACE WITH WHICH IRANIAN INSTITUTIONS WERE
ADAPTING TO LARGE-SCALE USE OF THE INTERNET. FOR EXAMPLE,
HE SAID THAT IRAN HAS NO E-COMMERCE CAPABILITY, WHICH
PREVENTS IRANIAN BUSINESSES FROM ADVERTISING AND
CAPITALIZING ON THE HUGE GROWTH IN INTERNET USE. HE
CONTINUED BY SAYING THAT IRANIAN BANKS KNOW OF THE
TECHNOLOGY, BUT WERE SLOW TO ADAPT, RESULTING IN THE LOSS
OF MILLIONS OF DOLLARS OF POTENTIAL REVENUE.


4. (C) FOR MOST IRANIANS ACCESS TO THE INTERNET IS EASY,
ESPECIALLY AMONG THE YOUNG, AND IT IS STEADILY GAINING
ACCEPTANCE AMONG ALL LEVELS OF SOCIETY. ACCORDING TO THE
SOFTWARE ENGINEER THE FIRST STEP INVOLVES BUYING A PREPAID
INTERNET CARD, WHICH ALLOWS IRANIANS TO DIAL UP FROM ANY
CONNECTED PC AND GAIN ACCESS. THE CHARGE IS RELATIVELY
CHEAP FOR IRANIANS, ACCORDING TO SEVERAL STUDENTS CONOFF
SPOKE WITH IN JUNE, RUNNING BETWEEN 2000 TO 4500 IRANIAN
RIALS (IRR) PER HOUR (.24 TO .55 USD WITH 1 USD = 8170 IRR
AS OF 23 JUNE 2003). BOTH THE ENGINEER AND THE INTERNET
BUSINESS OWNER ESTIMATE THAT THERE ARE APPROXIMATELY 2
MILLION INTERNET USERS IN TEHRAN. BOTH SAID THAT IRAN'S
TELECOMMUNICATIONS AUTHORITIES ARE PLANNING FOR A SURGE OF
UP TO 20 MILLION USERS NATIONWIDE WITHIN THE NEXT FIVE
YEARS.


5. (C) THE BOOM IN INTERNET SERVICE IS HAVING AN EFFECT ON
RELATED BUSINESS SECTORS, SUCH AS COMPUTER SALES. THE
SOFTWARE ENGINEER SAID THAT BUSINESS OPPORTUNITIES ABOUND
IN THE COMPUTER FIELD, SPURRED BY IRANIANS' DESIRE TO BE
CONNECTED TO THE WORLD. HE CONTINUED BY SAYING THAT THE
TREND IN GOVERNMENT AND INDUSTRY IS TO COMPUTERIZE, AND
SIGNIFICANT FUNDS ARE BEING SPENT TO MODERNIZE ALTHOUGH THE
PROCESS IS MOVING SLOWLY. FOR EXAMPLE, AN EMPLOYEE OF
IRAN'S CENTRAL BANK SAID THAT CURRENTLY THERE WAS NO
COMPUTER SYSTEM ALLOWING THE CENTRAL BANK OR OTHER BANKS IN
TEHRAN TO COMMUNICATE WITH BRANCHES IN OTHER CITIES. THIS
SHORTFALL SEVERELY LIMITS THE CENTRAL BANK'S AUDITING
CAPABILITY, AND THE BANK'S MANAGEMENT HOPES COMPUTERIZATION
MAY SOLVE THE PROBLEM. THE ENGINEER WENT ON TO SAY THAT
PERSONAL COMPUTERS WERE WIDELY AVAILABLE IN IRAN. MOST
SYSTEMS RELIED ON IMPORTED PARTS, WHICH WERE THEN ASSEMBLED
IN IRAN. HE ESTIMATED THE COST OF A COMPUTER TO BE ROUGHLY
4.1 MILLION IRR (APPROXIMATELY 500 USD WITH $1=8170 IRR AS
OF 23 JUNE 2003),NOT ENTIRELY OUT OF REACH FOR MIDDLE
CLASS IRANIANS. HE INDICATED THAT GETTING SPECIALIZED
EQUIPMENT, LIKE NOTEBOOK COMPUTERS, WAS MORE DIFFICULT, BUT
A LOT OF COMPUTER EQUIPMENT FROM ASIAN MANUFACTURERS IN
KOREA, CHINA, AND JAPAN IS FLOWING INTO IRANIAN MARKETS.

-------------- --------------
REGIME, OTHER OBSTACLES IMPEDE THE FLOW OF INFORMATION
-------------- --------------


6. (U) TEHRAN'S EFFORTS AT CENSORSHIP OF THE INTERNET
APPEAR TO BE ON THE RISE. IRAN'S MINISTRY OF POST,
TELEPHONE, AND TELEGRAPH (MPTT) BEGAN FILTERING THE FIRST
OF AS MANY AS 15,000 WEBSITES ON 10 MAY, ACCORDING TO
IRANIAN PRESS. THE FILTERING BEGAN FOLLOWING A DECREE FROM
IRAN'S SUPREME CULTURAL REVOLUTION COUNCIL, WHICH FORMED A
THREE MEMBER PANEL COMPRISED OF THE INTELLIGENCE MINISTRY,
MINISTRY OF ISLAMIC CULTURE AND GUIDANCE, AND THE NATIONAL
BROADCASTING AUTHORITY TO IDENTIFY PROHIBITED WEBSITES.
MINISTER OF THE MPTT, SEYYED AHMAD MO'TAMEDI, SAID IN MID-
MAY THE REASON FOR THE FILTERING WAS TO PREVENT ACCESS TO
IMMORAL SITES AND TO PREVENT THE DISSEMINATION OF ANTI-
REGIME POLITICAL AND SOCIAL VIEWS VIA THE INTERNET.
HOWEVER, DURING THE FIRST ROUND OF FILTERING A NUMBER OF
DOMESTIC- AND FOREIGN-BASED NEWS SITES WERE SHUT DOWN,
ACCORDING TO THE PRESS. INCLUDED AMONG THESE WERE POPULAR
PRO-REFORM SITES SUCH AS EMROOZ, ASR-E NOW, AND AFTAB;
SITES ASSOCIATED WITH SOME OF IRAN'S MOST WELL KNOWN
DISSIDENTS SUCH AS DARIUSH FORUHAR AND AYATOLLAH HOSSEIN
ALI MONTAZERI; AND SOME WESTERN-BASED PERSIAN LANGUAGE
SITES INCLUDING RADIO FARDA AND RADIO LIBERTY.


7. (C) DESPITE THE REGIME'S STEPS TO BLOCK INTERNET ACCESS
THEIR EFFORTS MAY ULTIMATELY PROVE FUTILE. ACCORDING TO
SEVERAL STUDENTS AND PROFESSIONALS CONOFF SPOKE WITH IN
LATE MAY AND JUNE, THE NEW, STRONGER GOVERNMENT FILTERS
DEAL SPECIFICALLY WITH POLITICAL AND NEWS SITES TEHRAN
VIEWS AS ESPOUSING ANTI-REGIME MESSAGES. MOST INTERVIEWEES
CITED FEW PROBLEMS IN GAINING ACCESS TO MAJOR NEWS
WEBSITES, SUCH AS CNN OR BBC, TO VIEW CURRENT INFORMATION
ON IRAN, WHICH, ACCORDING TO THE INTERVIEWEES, WAS MORE
IMPORTANT THAN HAVING ACCESS TO DISSIDENT WEB PAGES. IN
ADDITION, SOME IRANIAN OFFICIALS HAVE QUESTIONED THE
EFFECTIVENESS OF FILTERING, ACCORDING TO THE PRESS. THE
DEPUTY FOR LEGAL AND PARLIAMENTARY AFFAIRS FOR THE MPTT IN
LATE MAY SAID THAT CURRENTLY WEBSITES EXIST THAT OFFER A
WAY AROUND FILTERING AND THE NEW RESTRICTIONS WILL NOT
PROVIDE A COMPLETE BLOCK OF SITES DEEMED INAPPROPRIATE BY
THE REGIME. THE INTERNET BUSINESS OWNER OFFERED HIS VIEWS
ON THE ISSUE, SAYING THAT CENSORSHIP WAS NOT AN ISSUE FOR
MOST INTERNET SERVICE PROVIDERS BECAUSE THEY USE FIBER
OPTIC NETWORK CONNECTIONS THROUGH DUBAI TO LONDON, WHICH TO
DATE HAVE ESCAPED CENSORSHIP FROM GOVERNMENT AUTHORITIES.
THE ONLY PROBLEMS OCCURRED WITH THOSE PROVIDERS RELIANT ON
SATELLITE CONNECTIONS, WHICH THE GOVERNMENT COULD MORE
EASILY INTERRUPT.


8. (C) THE INTERNET COMPANY OWNER, WHO WORKS BOTH IN IRAN
AND THE UAE, CHARACTERIZED IRAN'S COMMUNICATIONS
INFRASTRUCTURE AS 'A MESS,' AND A SERIOUS IMPEDIMENT TO
FUTURE GROWTH OF THE INDUSTRY. HE SAID SERVICE PROVIDERS
OFFERED ALL TYPES OF SERVICES INCLUDING DIGITAL SERVICE
LINES (DSL) AND DIAL UP INTERNET CONNECTIONS, BUT OFTEN
CONNECTIONS WERE UNRELIABLE. HE SAID APPLICATIONS FOR DSL
CONNECTIONS TAKE UP TO NINE MONTHS FOR INSTALLATION, WHILE
IN MOST WESTERN COUNTRIES, AND EVEN IN DUBAI, IT TAKES ONLY
2-4 DAYS. HE SAID THAT MANY NEW BUILDINGS BEING CONSTRUCTED
IN TEHRAN DO NOT TAKE INTO ACCOUNT POTENTIAL INTERNET
USAGE. USUALLY, A CONTRACTOR WILL ONLY APPLY FOR 40-50
CONNECTIONS IN A RESIDENTIAL COMPLEX OF 120 APARTMENTS,
MEANING ADDITIONAL CONNECTIONS HAVE TO BE INSTALLED. ALL IN
ALL HE SAID INTERNET SERVICE WAS UNEVEN, BUT THE SECTOR HAD
POTENTIAL IF ITS INFRASTRUCTURE WOES WERE RESOLVED. THE
ENGINEER ASSESSED IRAN'S INFRASTRUCTURE AS "OK" WITH NEW,
FASTER CONNECTIONS BECOMING AVAILABLE. HOWEVER, PROBLEMS
REMAINED WITH SMALLER COMPANIES WHOSE SERVERS COULD STILL
BE EASILY OVERLOADED, LEAVING MOST IRANIANS WITH UNRELIABLE
SERVICE.

-------------- --------------
CELLULAR COMMUNICATION IN IRAN: BUSY SIGNALS ON THE RISE
-------------- --------------


9. (C) THE INTERNET COMPANY OWNER ALSO SPOKE ABOUT IRAN'S
EXPANDING MOBILE PHONE SECTOR. HE ESTIMATED THAT CURRENTLY
THERE WERE MORE THAN 1.5 MILLION CELL PHONES IN TEHRAN WITH
MORE BEING ADDED EVERY DAY. ACCORDING TO IRANIAN PRESS, THE
MPTT IS UNDERTAKING AN EXPANSION EFFORT NATIONWIDE TO
INCREASE THE NUMBER OF USERS OF THE MOBILE COMMUNICATIONS
NETWORK FROM TWO TO FIVE MILLION. THE BUSINESS OWNER
CONTINUED BY SAYING THAT ONE OF THE MAJOR OBSTACLES TO
DOING BUSINESS WAS THE MONOPOLY ENJOYED BY THE
TELECOMMUNICATIONS COMPANY OF IRAN (TCI). PRIVATIZATION
TALKS WERE CURRENTLY UNDERWAY, AND ACCORDING TO AN IRANIAN
CONSULTANT CONOFF SPOKE WITH IN JUNE, DEPUTY MINISTER FOR
PROGRAMMING AT THE MPTT, NASROLLAH JAHANGARD, IS
SUCCESSFULLY SPEARHEADING THE EFFORT TOWARDS A CONCLUSION.
THE BUSINESS OWNER CONTINUED SAYING THAT TCI WAS COMPETING
WITH SMALLER COMPANIES, HAVING RECENTLY SLASHED THEIR
CELLULAR RATES BY UP TO 70 PERCENT, AND WERE LOOKING TO
QUASH THEIR COMPETITION BEFORE PRIVATIZATION TOOK PLACE.


10. (C) THE INTERNET COMPANY OWNER ALSO SPOKE ABOUT THE
CURRENT BUSINESS LANDSCAPE IN THE TELECOM SECTOR, PROBLEMS
FACING THE INDUSTRY, AND THE IMPACT OF FOREIGN COMPANIES.
HE SAID THE PROCESS TO START HIS BUSINESS WAS QUITE SIMPLE.
IRANIAN BANKS OFFERED FAVORABLE RATES ON BUSINESS LOANS AND
THE GOVERNMENT SUPPORTED NEW TELECOM COMPANIES BY NOT
REQUIRING THEM TO PAY TAXES. HOWEVER, HE WAS PESSIMISTIC
ABOUT THE NEXT TWO YEARS BECAUSE THE IRANIAN MARKET WAS
VIRTUALLY CLOSED AND FEW OPPORTUNITIES EXISTED FOR IRANIAN
COMPANIES TO EXPAND INTO OVERSEAS MARKETS. ONE MAJOR
PROBLEM WITHIN THE INDUSTRY WAS POOR PLANNING RELATED TO
CELL PHONE TOWERS. THERE WERE NOT ENOUGH OF THEM, WHICH IN
TURN, PROVIDED POOR CONNECTIONS AND NOT ENOUGH COVERAGE FOR
THE VOLUME OF DEMAND. HE ALSO LAMENTED THE FOREIGN
COMPETITION IRANIAN COMPANIES HAD TO FACE. CURRENTLY MODELS
FROM FOREIGN COMPANIES SUCH AS NOKIA AND ERICSSON WERE VERY
POPULAR, AND COMPANIES FROM CHINA AND KOREA (SAMSUNG) WERE
DOMINATING THE IRANIAN MARKET. IN ADDITION, EUROPEAN
MANUFACTURERS SUCH AS NOKIA AND ERICSSON HAD RECENTLY WON A
CONCESSION FROM TCI TO MANUFACTURE AND DISTRIBUTE SIM CARDS
UNDER THEIR OWN BRAND NAME IN IRAN, GIVING THEM A STRONGER
PRESENCE WITHIN THE DOMESTIC MARKET.

--------------
NO HOLDING BACK THE TIDE
--------------


11. (C) COMMENT: IRANIANS ARE DETERMINED TO LEAP INTO THE
INFORMATION AGE, DESPITE THE REGIME'S HESITATION, BY FULLY
EMBRACING MODERN TECHNOLOGIES SUCH AS THE INTERNET AND
MOBILE PHONES. IRAN IS EXPANDING ITS INTERNET AND MOBILE
PHONE SYSTEMS WITH THE ONLY OBSTACLE BEING THEIR OWN
INFRASTRUCTURE. THESE UPGRADES WILL REQUIRE SIGNIFICANT
INVESTMENTS OF MONEY AND TECHNICAL EXPERTISE TO RECTIFY,
BUT IT CAN BE DONE. CONSERVATIVE ELEMENTS OF THE
GOVERNMENT, HOWEVER, APPEAR DETERMINED TO STEM THE FREE
FLOW OF INFORMATION. THEIR FOCUS IS ON THOSE WEBSITES
ESPOUSING ALTERNATIVES TO THE CURRENT REGIME, BUT BASED ON
INTERVIEWEES' ACCOUNTS THEY ARE FIGHTING A LOSING BATTLE.
TECHNICAL SHORTCOMINGS PREVENT BLOCKING "PROHIBITED" SITES
ENTIRELY, AND MOST IRANIANS CONOFF SPOKE WITH ARE GETTING
THE NEWS THEY WANT DESPITE TEHRAN'S EFFORTS. TEHRAN COULD
EXPAND FILTERING TO INCLUDE MAINSTREAM DOMESTIC AND
WESTERN-BASED MEDIA SITES OR PROHIBIT INTERNET ACCESS ALL
TOGETHER. HOWEVER, SUCH STEPS WOULD LIKELY ENGENDER A
BACKLASH FROM INTELLECTUALS, STUDENTS, AND OTHER MIDDLE- TO
UPPER-CLASS IRANIANS WHO HAVE COME TO SEE MODERN
COMMUNICATIONS METHODS AS CENTRAL TO DAILY LIFE. END
COMMENT.


LANCIA