UK and US united over tackling Iran's influence, weapons supply to Russia

Starlink devices have been in limited use for nearly two years now but in the past two weeks there has been a sudden social media interest that is difficult to explain given the unaffordability of the terminals and monthly subscription for most Iranians.

However, the availability of Starlink is seen by many as a potential game-changer for bypassing state-imposed online restrictions, allowing greater access to unfiltered internet in Iran.

The terminals typically cost around $500, depending on the model, with a monthly subscription fee of $110. However, in the Iranian market, prices are significantly higher, reaching up to three times the standard cost. Users still need domestic internet subscriptions to connect to government websites and the banking system. Starlink alone cannot bypass these local services, as access to critical domestic infrastructures remains tied to Iran's national network, requiring users to maintain both international and domestic connections.

Installation of Starlink and speed test in Tehran

To put the potential cost in perspective, an ordinary employee earns around $200 a month and can never spend hundreds of dollars for unfettered internet access.

There is also an element of risk involved in the use of Starlink. The terminals have to be smuggled into country from neighboring countries, particularly the Iraqi Kurdistan and the Persian Gulf countries as Starlink has no regulatory approval to operate in Iran.

In October 2023, Iran's Ministry of Telecommunications demanded that SpaceX obtain licensing for Starlink operations and filed a complaint with the International Telecommunication Union (ITU) over unauthorized use in Iran, which resulted in a ruling in Iran's favor. While over 60 countries have approved Starlink services, Iran is likely to demand access to user data—a request SpaceX would almost certainly reject.

Those found using Starlink in Iran risk prosecution for possessing smuggled goods. In November 2023, Iranian security forces confiscated 22 Starlink terminals, claiming they were CIA property intended for use by the office of dissident Sunni cleric Mowlavi Abdolhamid Esmail-Zehi.

The illicit terminals must be registered in the countries from where they are smuggled for the same reason and operate in ‘roaming’ mode once installed in Iran.

In many cases, social media posts suggest that multiple families in large apartment buildings share a single Starlink device to reduce the cost, similar to how satellite dishes were shared when first introduced in the 1990s, despite being banned.

Many Iranians recall police raids and jamming that rendered satellite dishes useless. The government continues to resort to jamming, especially during unrest, while also implementing internet blackouts to stifle dissent.

Since the early 2000s, the Islamic Republic has tightly controlled the internet, forcing most Iranians to rely on anti-filtering software to access blocked websites and social media. The widespread use of such software is a major cause of slow internet speeds, with allegations that influential figures behind the restrictions benefit from selling VPNs.

Iran has been working on a national network to cut off access to the global internet and gain complete control over online content.

During his campaign, President Masoud Pezeshkian criticized internet restrictions, which impact freedom and hurt hundreds of thousands of small businesses. However, his government has yet to make any meaningful changes to the strict policies set by a council that includes key state officials, such as the Revolutionary Guards and police chiefs.

Hesam Misaghi, an expert from the Persian-language Telegram channel Starlink for Iran, told Iran International that it’s difficult to determine how many Starlink terminals are currently in use in Iran. He estimates there could be between 10,000 to 20,000 terminals, based on information from merchants and installation technicians.

Starlink satellites were activated over Iran in September 2022 after the US Treasury authorized certain transactions to ensure Iranian protesters could access the internet to share footage of the crackdown. By October 2022, after the Mahsa Amini protests spread nationwide and authorities imposed internet blackouts, Starlink terminals were smuggled into Iran and activated.

In January 2023, the head of the Tehran Telecom Traders Union, Mehdi Mohebi, quoted an “official” whose identity he did not want to reveal, saying that around 800 Starlink terminals had been smuggled into Iran. A few days earlier, Elon Musk had said the number of active terminals in Iran was approaching 100.

According to the Ham-Mihan newspaper, patients are seeking refuge in countries like Austria, Germany, the Netherlands, and the UK.

As death rates among SMA patients have also risen sharply, with over 50 people having died since last year, the crisis is worsening in Iran where a flood of medical professionals have fled to seek work abroad.

Saeed Azamian, former director of the SMA Association, said the situation worsened after medication for children under 11 was halted last December, leading to the deaths of at least 20 children suffering from the genetic neuromuscular disease.

In March, Iran International reported that 10 children had died in one month alone as a result of the crisis.

A report published last year also noted that of the 781 patients registered in Iran by October 2022, 164 patients died, the majority of them during the first 20 months of life.

Over the past three years, patients and their families have protested against the Ministry of Health for failing to import or distribute the medication.

Families are selling their homes and belongings to pay brokers and immigration lawyers to seek asylum in European countries. The report cited the case of a woman named only as Zahra, who fled to the Netherlands with her sick six-year-old son. They now live in a camp but receive the expensive medication he needs for free.

Families had previously relied on campaigns for medication, but donations dwindled after President Ebrahim Raisi promised the government would supply the necessary drugs, a promise he failed to keep.

Months passed before the partial import of medicines began and patients had been paying up to 250 million tomans per bottle of Risdiplam syrup, a costly treatment for SMA. The medication was not part of Iran's official drug list until late 2021.

The Ministry of Health claimed it would assess the drug's effectiveness, but results were delayed while the efficacy of drugs like Spinraza and Risdiplam has already been proven in multiple other countries.

The Chairman of the Iranian and Foreign Joint Investment Association, Hossein Salimi, in an interview with ILNA admitted that Iran's energy crisis could be the final nail in the coffin for its already anemic foreign investment prospects. According to Salimi, the ongoing shortfall in energy production and consumption is so severe that it may deter foreign investors more than any other issue.

$5 Billion: A contrast to regional success stories

Iran’s much-publicized $5 billion in foreign investment last year is dwarfed by the figures coming out of neighboring countries. For example, the UAE attracted $22.5 billion in foreign direct investment (FDI) in 2022, and Saudi Arabia, riding the wave of Vision 2030, secured around $21 billion the same year. These numbers are several times higher than Iran’s, highlighting how far the Islamic Republic has fallen behind its regional rivals in the race to attract global capital.

While Iranian officials like Salimi say that the $5 billion investment is a small victory, the reality is that it’s hardly enough to compensate for the country's systemic mismanagement, outdated infrastructure, and the suffocating impact of international sanctions. In comparison, the UAE and Saudi Arabia, free from such constraints, have built an investor-friendly environment supported by stable energy supplies, global trade relationships, and consistent economic reforms.

Energy crisis: A ticking time bomb

Salimi’s comments underscore a critical point: even if foreign companies wanted to invest in Iran, they would face challenges due to the country’s dysfunctional energy sector. Years of underinvestment, combined with poor management, have left Iran with a 14,000-megawatt electricity deficit. As a result, the country is struggling to meet even its current consumption, let alone the additional energy needs of foreign industrial investors.

Salimi’s warning points to a reality: "If tens or hundreds of foreign industrial companies come to Iran... will we be able to provide the necessary water, electricity, and gas for these industries?" The answer, it seems, is no. Any influx of foreign business would likely run into the same problems that Iranian citizens already face—frequent blackouts, water shortages, and limited access to energy resources.

The problems run deeper than just energy shortages. Salimi’s reminder of energy giant Total's departure from Iran is emblematic of how the country’s geopolitical entanglements have stunted its growth. In 2018, after the US reimposed sanctions, Total, one of the world's largest oil and gas companies, pulled out of a multibillion-dollar gas deal, signaling to the world that Iran was simply too risky for long-term investment. Since then, the situation has only worsened, with Iran remaining on the Financial Action Task Force (FATF) blacklist, limiting its ability to engage in international banking and financial exchanges.

Small investments, big problems

Salimi's mention of the $5 billion in foreign investment last year underscores another issue: the size and type of investments Iran is attracting. According to Salimi, 10-20% of this investment came from Iranians living abroad, while small Afghan investors accounted for less than 20%. More than half of the remaining investment came from companies outside these two groups, mostly in industries like food production, which require relatively small capital outlays.

Meanwhile, an energy expert, Morteza Behroozifar, warns that Iran’s oil industry alone needs $250 to $300 billion in investment to remain afloat. “We are currently experiencing shortages of gas, gasoline, and diesel," Behroozifar said in a recent interview with ISNA, adding that without massive foreign investment and a change in management, Iran’s energy sector is headed for collapse. The $5 billion that officials are highlighting is a fraction of what is required to stabilize and grow the economy.

The road ahead: Will Pezeshkian's government deliver?

President Masoud Pezeshkian has acknowledged the need for at least $100 billion in foreign investment to tackle the country’s growing problems. Yet, according to observers, attracting that kind of capital will require more than just rhetoric—it will demand systemic reform, transparency, and above all, the resolution of Iran’s energy crisis.

With a 14,000-megawatt electricity deficit, Pezeshkian’s cabinet will have to overhaul the country’s infrastructure while navigating the complex web of sanctions and international isolation that has crippled previous administrations.

Iran's Chamber of Commerce, Industries, Mines, and Agriculture (ICCIMA) serves as the voice and the representative body for the private sector. However, the government maintains a tight grip on the chamber, often resisting its efforts to operate independently.

After about a year of controversy surrounding Hossein Selahvarzi’s election as head of the chamber, which eventually led to his dismissal late last year, *Mizan News Agency*, linked to Iran's judiciary, reported on Sunday that the Tehran Court of Appeals sentenced him to six months in prison and a fine for "spreading lies." The campaign against Selahvarzi was reportedly orchestrated by figures close to former President Raisi's administration, further intensifying the political nature of his case.

Last year, EcoIran reported that Tehran deputy prosecutor general had issued an order for the indictment and prosecution of Selahvarzi on charges of insulting the founder of the Islamic Republic Ruhollah Khomeini and Supreme Leader Ali Khamenei in the Tehran Revolutionary Court.

He has frequently criticized officials and their policies in his tweets, and it appears that the main reason for this verdict is his tweets criticizing authorities and supporting protesters during the 2022 protests.

Known for his criticism of government’s economic policies, Selahvarzi was elected as the president of the Chamber of Commerce in June 2023. The election immediately sparked reactions from the hardliners and state media. A few days after Selahvarzi’s election, around 30 hardliner lawmakers had urged the government to annul the elections.

IRGC-affiliated Tasnim News Agency published images of his social media posts from the 2022 nationwide protests for "Woman, Life, Freedom," labeling the Chamber of Commerce president as a "dissident. Mehr News Agency also released documents claiming that Selahvarzi had been disqualified by the Ministry of Intelligence before the Chamber of Commerce board election.

On several occasions, the state media announced that Selahvarzi had resigned but he denied the reports himself on social media. Finally in November, Selahvarzi was dismissed by the Minister of Economy.

Over the years, Selahvarzi has held various economic positions, though he is politically aligned with the so-called Reformists. While the election of reform-minded President Masoud Pezeshkian raised hopes for a shift in economic policy, the entrenched influence of the previous administration's hardline economic stance seems to have limited the potential for significant change.

The chairman of the chamber, often referred to as the “private sector’s parliament” with over 400 members, has the role of coordinating between the private sector and government and is sometimes required to participate in meetings with government officials.

Members of the chamber have often criticized regime policies that have led to an economic crisis, including a confrontational foreign policy. The chambers often produce economic reports that the government finds embarrassing, or they criticize proposed budget bills and other plans.

“Chairmanship of the chamber of commerce is not a government position in the Islamic Republic. The chamber is a non-governmental and non-state body and represents the private sector,” Abdolreza Davari, one of former President Mahmoud Ahmadinejad's advisors and confidants, said last year, calling “politically-motivated interference” in chamber of commerce elections by the state “a dangerous phenomenon”. “The affairs of the chamber of commerce should be decided and regulated by the members of the chamber itself,” he added.

A report published last week by The Wall Street Journal suggested that Iran had transferred short-range ballistic missiles to Russia, prompting outrage in Kyiv. At least one Iranian lawmaker confirmed the report Sunday, conflicting a senior Revolutionary Guards commander who had dismissed the claim as “psychological warfare.”

White House national security spokesperson John Kirby added a layer of uncertainty to the situation Monday, when he refused to verify the Wall Street Journal report.

“I cannot confirm the reports that the transfer has happened,” he said in a presser, “but I would point you to what we've said in the past, that any such provision of that kind of technology… could, depending on what the deal, how it's consummated, have equally deleterious effects on the Middle East.”

“An Iran that already has an improving ballistic missile program, we can only assume would want to stand to gain from some sort of partnership with Russia to improve their capabilities in the region,” Kirby added.

Iran is known to have sent Russia drones, but a provision of ballistic missiles would be seen as a serious escalation. So far, no such deal has been officially announced. "No missile was sent to Russia," Brigadier Fazlollah Nozari, a high-ranking IRGC commander said Monday, calling the allegations "psychological warfare".

'Devastating consequences'

On Monday, Kyiv warned Iran that confirmation of such missile deliveries would have "devastating and irreparable consequences" for bilateral relations. Senior Ukrainian official Andrii Yermak further called for Western support, suggesting that his country “must be allowed to destroy warehouses storing these missiles in order to avoid terror."

Iran’s growing support for Russia’s war effort has also been criticized in Tehran. On Sunday, a former Iranian lawmaker who used to chair of the committee on national security and foreign policy slammed Iran's arms sales to Russia as "the dirtiest example of Russophilia", warning that the leaders of the Islamic Republic are “dragging” the country “further into global conflict and sanctions which have led to the country's worst economic crisis” in more than four decades.

Also on Sunday, a sitting Iranian MP seemed to confirm Tehran’s military assistance to Russia, albeit downplaying the threats from Ukraine and its Western allies. Ahmad Bakhshayesh Ardestani justified the arms sales to Russia by saying his country has to subsequently "barter" for its needs, including soybeans and wheat. "Part of the barter involves sending missiles, and another part involves sending military drones to Russia," he said.

When asked whether sending ballistic missiles to Russia might lead to further sanctions or trigger the so-called "snapback" mechanism against Iran, the member of the Parliament's National Security and Foreign Policy Committee replied, "It can't get any worse than it already is. We give missiles to [our proxies] Hezbollah, Hamas, and Hashd al-Shaabi, so why not to Russia?"