Iran Eyes Transit Fees On Hormuz Subsea Internet Cables Operated By Global Tech Firms

Iran is reportedly considering charging “transit fees” on submarine internet cables that pass through the Strait of Hormuz, a key global shipping and data route connecting Europe, Asia and the Middle East.

The proposal has raised concerns among tech companies, maritime experts and security analysts because the strait carries not only oil shipments but also critical global data traffic.

According to Iranian Revolutionary Guard-linked media, including Tasnim News Agency, the plan would require international cable operators and major technology companies such as Google, Meta, Microsoft and Amazon to comply with Iranian regulations and potentially pay fees for using cables passing through or near Iranian waters.

Some reports also suggest Iran could require companies to operate under its legal framework.

Iranian officials, including military spokesperson Ebrahim Zolfaghari, have said Tehran intends to impose fees on internet cables and may regulate how they are installed, repaired and maintained.

Iranian media have compared the idea to the Suez Canal model, where Egypt earns revenue from ships passing through its waters.

The Strait of Hormuz is one of the world’s most important maritime chokepoints. It is also a major digital corridor.

Around seven major subsea fibre-optic cables pass through the area, carrying internet traffic, banking data, cloud services, military communications and financial messaging systems like SWIFT between Asia, Europe and the Gulf region.

Some cables, including FALCON and Gulf Bridge International (GBI), pass through Iranian territorial waters. However, most cables are laid closer to Oman to reduce security risks.

Iran has not directly said it will cut or damage the cables, but state-linked media have warned that disruption is possible.

Experts say Iran and its regional allies could theoretically target cables using combat divers, submarines or underwater drones.

There are also concerns that proxy groups, such as Yemen’s Iran-aligned Houthis, could damage cables, as seen in 2024 when three submarine cables in the Red Sea were cut after a ship’s anchor dragged across the seabed, causing major internet disruption in the region.

Cable systems in the Strait of Hormuz handle a relatively small share of global internet traffic, less than 1% of worldwide bandwidth.

However, experts warn that damage could still cause serious disruption across the Middle East, India, and parts of East Africa, affecting banking, outsourcing, energy operations and communications.

The proposal also faces major legal and practical challenges. Under international maritime law, strategic straits used for international navigation are protected.

Existing agreements for laid cables also cannot easily be changed. Legal experts say Iran would be bound by contracts for existing cables already installed in its waters.

Another major obstacle is sanctions. Many Western companies are legally barred from making payments to Iran, making it unclear how such a fee system could be implemented in practice.

Despite this, Iran’s statements are being seen by analysts as a signal of leverage rather than an immediately enforceable policy.

Officials say this move shows Iran can put pressure on global infrastructure linked to the Strait of Hormuz, not just oil shipping.

Subsea cables have long been a critical part of global communication systems. Modern cables can carry massive volumes of data at high speed, supporting everything from streaming and online services to military communications and global financial markets.

References: interestingengineering, CNN