Information + Communication Technology E1:R2

Information + Communication Technology E1:R2

Key Developments

◢ Feared as a threat to net neutrality, the launch of a National Information Network promises greater internet speeds and lower prices, but with lingering questions around access

◢ A new survey has determined that 55% of Iranian households have access to the internet

Countdown to Launch of National Information Network

The National Information Network has previously been known by such names as the National Internet, National Internet Network, and National Intranet, and is the product of eleven years of effort by successive governments. In the final year of President Rouhani’s first term in office, the Ministry of Communications and Information Technology is expected to officially unveil the network.

There has a great deal of contention over the years as to what form the national network should take, and plenty of concerns among users that their access to the "world wide web" would be limited or shut off altogether. Many of these concerns emanated from the fact that, as with an intranet, users of the new network would not require access to the global internet to use key functions and that they would be able to maintain connectivity even if the internet was down.

However, after more than a decade of uncertainty, the setup of the network has been clarified.  The Rouhani administration's commitment to the network goes back to the early days of his first term, when the Supreme Cyberspace Council voted to launch the network in line with the country's development aims. 

Under targets set in Iran's Fifth Development Plan, as many as 60% of Iranian households will have access to high-speed bandwidth at a reasonable price, serviced by local datacenters.

On the assumption that there are 30 million households in Iran, the plan will require at least 15 million Asymmetric Digital Subscriber Lines to be operational. There are currently estimated to be just 10-11 million ADSL lines across the country, meaning that infrastructure is lagging behind. However, with the launch of 3G and 4G mobile Internet providing extensive wireless data coverage, the internet penetration rate has exceeded the 60% threshold.

The expectation for the National Information Network to deliver quality, high-speed and inexpensive access to communications relies on the launch of a datacenter, a data exchange center, and a content distribution center.

According to new pricing guidelines, the distinction between access to internal and external traffic on the National Information Network is designed to lower the price of user access to online services. Users who access internal websites and services, will have to pay less for bandwidth than those who access websites and services hosted overseas. By most global standards, such a rule will violate the principal of "net neutrality." 

According to the Ministry of Communications, external and internal traffic currently account for 60% and 40% of bandwidth respectively. The launch of the National Information Network is intended to see those proportions reverse. The launch of the National Information Network will mean Iranian users will be able to use a wider range of services hosted domestically, with the incentive over lower prices. 

55% of Iranians Households Online

A survey conducted in the Iranian calendar year 1394 (ending March 19, 2016) has determined that 55% of Iranian households enjoy access to the Internet and that 57% of households have a computer. The survey on household access to the Internet and individuals’ use of ICT was the fourth so far in the country and covered a sample of 25,000 households. 

Led by the the Information Technology Organization of Iran along with the Statistical Center of Iran, the survey examined 16 indicators recommended by the International Telecommunications Union (ITU). 

The survey showed that 55.5% of Iranian households (13,479,815 households) had access to the Internet. The number of households with access to computers stood at 57.4% (13,938,943).

There remains clear room for growth in internet penetration. The rise in the ICT penetration rate among members of the public will promote ICT goods and services as well as public spending on ICT and thus help companies in this sector grow.

For instance, when Atiye Dade Pardaz, a company which runs SMS-based services and solutions, was listed on Tehran Stock Exchange, it drew significant investor interest. Over a 20-day period, its value rose by as much as 85%. 

Iran's First Cloud Datacenter Inaugurated

Iran's first cloud data center was inaugurated earlier in August in a ceremony attended by the Minister of Communications and Information Technology, Mahmoud Vaezi.

The center, which belongs to a private company called Afranet, has space for 20,000 servers and has required around $11 million in investment. A cloud datacenter is an essential component for a national network, as experienced by a number of governments over the years. Afranet is seeking to dedicate a free server on the cloud service to digital entrepreneurs.

Government support for the launch of the datacenter amounted to $4.4 million, 60% of which was provided by the Innovation and Prosperity Fund; the remaining 40% was provided by the Ministry of Communications and the Electronic Support Fund. As many as 100 free cloud-based servers are to be dedicated to entrepreneurs selected by the Ministry of Communications for up to one year.

After the launch of the center, there were rumors that the servers of Telegram messaging network, the most popular app of its kind in Iran, were to be transferred to the country. Iranian officials have previously warned Telegram it had until the end of the year to transfer its servers to Iran or risk being blocked.

Presently, Iranians account for as much as 70% of Telegram’s users. Given that Iranian users do not trust apps with local servers, the number of Telegram users is projected to drop dramatically if it decides to transfer its servers to Iran using the newly-launched Iranian cloud datacenter.

Boosting Online Video

According to PCWorld, video file traffic has hit a record 70% of bandwidth in North America. However in Iran, internet watch much lower amounts of online video. Data limits on internet packages and expensive surcharges discourage consumption of digital video. 

In order to change habits, three popular video-sharing websitesAparat, Filimo, and Telewebion, have gone directly to three key internet hostsAsiaTech, Rightel, and Shatelto secure a 50% price reduction for the end user streaming video. Moreover, the Communications Regulatory Authority has said it plans to cut ADSL and mobile service prices in a bid to encourage users to watch more video online so that Iran can catch up with global averages.

Renewables + Utilities E1:R2

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