Emboldened by its wartime success in closing the Strait of Hormuz, Iran is turning its attention to one of the hidden arteries of the global economy: the undersea cables beneath the waterway that carry vast amounts of internet and financial traffic between Europe, Asia, and the Persian Gulf.
The Islamic Republic wants to charge the world’s biggest tech companies for the use of undersea internet cables laid under the Strait of Hormuz, and state media has vaguely threatened that traffic could be disrupted if the companies don’t pay. Lawmakers in Tehran last week discussed plans that could target undersea cables linking Arab countries to Europe and Asia.
“We will impose charges on internet cables,” Iranian military spokesman Ebrahim Zolfaghari declared to X last week. Iran’s plan to extract revenue from the strait would require companies such as Google, Microsoft, Meta and Amazon to comply with Iranian law, while undersea cable companies would have to pay license fees to transit the cables, and repair and maintenance rights would be given exclusively to Iranian companies, according to Iranian Revolutionary Guards-affiliated media.
Some of these companies have invested in cables that pass through the Strait of Hormuz and the Persian Gulf, but it is unclear whether these cables pass through Iranian waters.
It’s also unclear how the administration can compel tech giants, which are prohibited from making payments to Iran under tough U.S. sanctions, to comply. As a result, companies themselves may view Iran’s statements as a sham rather than a serious policy.
Still, state media has issued thinly veiled threats warning of damage to cables that could affect internet connections around the world, affecting some of the trillions of dollars in global data transmission.
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CNN has contacted the companies mentioned in the Iranian report.
Iran is increasingly suggesting it has powerful tools at its disposal beyond military force, amid growing concerns that the war will resume after US President Donald Trump returns from China. The move underscores the importance of the Strait of Hormuz beyond energy exports, as Tehran seeks to turn its geographic influence into long-term economic and strategic power.
Submarine cables form the backbone of global connectivity and carry much of the world’s internet and data traffic. Targeting them could threaten not just internet speeds but everything from banking systems, military communications, and AI cloud infrastructure to remote work, online gaming, and streaming services.
Dina Esfandiary, head of the Middle East at Bloomberg Economics, said Iran’s threats are part of a strategy to assert its influence over the Strait of Hormuz and ensure the regime’s survival, a core objective of the Islamic Republic in the war.
“It is aimed at imposing significant costs on the global economy and ensuring that no one will try to attack Iran again,” she said.
Several major intercontinental submarine cables pass through the Strait of Hormuz. Mostafa Ahmed, a senior researcher at the United Arab Emirates-based Habtoor Research Center, who published a paper on the impact of a major attack on the Gulf’s undersea communications infrastructure, said international carriers have deliberately avoided Iranian waters and instead concentrated the bulk of their cables in a narrow band along the Omani side of the waterway due to long-standing security risks with Iran.
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However, two of these cables, Falcon and Gulf Bridge International (GBI), pass through Iranian territorial waters, said Alan Mauldin, director of research at telecommunications research firm Telegeography.
Although Iran has not explicitly said it will block the cables, it has repeatedly expressed through officials, lawmakers and state media its intention to punish America’s allies in the region. This appears to be the latest asymmetric warfare technique devised by the regime to attack neighboring countries.
The Islamic Revolutionary Guards Corps (IRGC), armed with combat divers, mini-submarines and underwater drones, poses a danger to the underwater cables, Ahmed said, adding that any attack could trigger a cascading “digital catastrophe” across multiple continents.
Iran’s neighbors across the Persian Gulf could face severe disruptions to internet connectivity, potentially impacting vital oil and gas exports and banking operations. Beyond India, a large portion of internet traffic could be affected, with the huge outsourcing industry facing billions of dollars in losses, Ahmed said.
Mr Ahmed said the strait is an important digital corridor between data hubs in Asia such as Singapore and several cable landing stations in Europe. The disruption could also slow financial and cross-border trade between Europe and Asia, and parts of East Africa could face internet blackouts.
And the damage could be even worse if Iranian proxies decide to employ similar tactics in the Red Sea.
According to Hong Kong-based HGC Global Communications, in 2024, three undersea cables were severed when a ship attacked by Yemen’s Iranian-allied Houthi rebels dragged its anchor across the ocean floor while sinking, disrupting nearly 25% of internet traffic in the region.
Although the impact of cable damage could be greater in the Middle East and some Asian countries, Telegeography said that “cables passing through the Strait of Hormuz will account for less than 1% of the world’s international bandwidth by 2025.”
The first transatlantic telegram was sent over an undersea cable in 1858, a 98-word message of congratulations from Britain’s Queen Victoria to American President James Buchanan, and it took more than 16 hours to arrive. Since then, the importance of submarine cables has increased dramatically.
Today, a single optical fiber in a modern undersea cable can carry the equivalent of about 150 million simultaneous phone calls at the speed of light, according to the International Cable Protection Commission.
The practice of cutting off underwater communication cables dates back nearly two centuries to when the first telegraph cable was laid across the English Channel in 1850. In the opening act of World War I, Britain cut Germany’s vital telegraph cables, cutting off communications with the German military.
Most modern cable damage causes minimal disruption because carriers can quickly reroute traffic across a global network of subsea networks. But given the world’s near-absolute dependence on data flows through these cables, massive damage today would have a far greater impact than in the telegraph era.
Experts say Iran’s ongoing war could significantly complicate attempts to repair the cable, as maintenance vessels would have to remain stationary for long periods of time while repairs were made. Adding to the challenge is that of the five maintenance vessels normally operating in the region, only one remains in the Persian Gulf, Mauldin said.
Iranian news outlets argued that the proposal to charge fees for submarine cables passing through its waters complies with international law, citing the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which contains provisions governing submarine cables.
Although Iran has signed but not ratified the treaty, the legal community considers it binding under customary international law. Article 79 of the United Nations Convention on the Law of the Sea states that coastal states have the right to establish conditions for the entry of cables or pipelines into their territory or territorial waters.
Iranian media points to Egypt as a precedent. Cairo takes advantage of its strategic location on the Suez Canal to bring in a number of undersea cables connecting Europe and Asia, generating hundreds of millions of dollars annually in shipping and license fees.
However, according to international law experts, the Suez Canal is an artificial waterway dug into Egyptian territory, while the Strait of Hormuz is a naturally formed strait governed by a different legal framework.
“For the existing cables, Iran has to honor the contracts signed when the cables were laid,” Irini Papanikolopoulos, a professor of international law at SOAS University of London, told CNN. “However, for new cables, any country, including Iran, can decide whether and under what conditions the cables can be laid in its territorial waters.”
Bloomberg Economics’ Esfandiary said Iran “theoretically knew” it had leverage over the strait, but it was unclear how significant the consequences of acting against these threats would be.
Now, Tehran has “discovered its influence,” she added.
