Telecoms Account for 2% of Iran GDP

With $420 billion GDP in 2016 and the telecom sector estimated at $8.5 billion, the telecoms industry accounts for approximately 2% of Iran’s gross domestic product.

Telecoms Minister Mohammad Javad Azari Jahromi says, “The gross value added by the telecommunications sector stands at 350 trillion rials ($8.5 billion).” According to International Monetary Fund, Iran’s GDP per capita is $5,250.

Jahromi was speaking at a meeting with officials from Iran Chamber of Commerce, Industries, Mines and Agriculture on Nov. 28, the chamber’s website reported.

He again called for sweeping change in the crucial telecom sector and said that the country “cannot afford to miss opportunities” the huge ICT sector is offering on the international level.  

This is the first time that such crucial data is reported by a senior official.

It is pointless to compare Iran’s telecoms industry GVA with other developed and developing countries simply because each economy categorizes communication under a different group. In fact, in many economies it is not compartmentalized separately.

According to online data base Investopedia, the latest available statistics, which dates back to 2014, estimated the global communication sectors’ GVA at $2 trillion or approximately 2.5% of world GDP.

Jahromi says the contribution of the telecoms industry to the economy should double in the coming years. “Iran needs to follow the example of developing countries like India and increase the share of communications and information technologies in the economy.”

India is planning to increase the share of ICT sector in the economy up to 20% by 2025, the minister was quoted as saying. “Iran should follow suit.”

However, he cautioned, “While the world is focused on the new opportunities that modern technologies offer, there are people in Iran’s power circles who resent the sea change technology is promising.”

Jahromi is also of the opinion that his ministry’s structure should be overhauled and its statute should be rewritten to be compatible with the demands of modern businesses.

Referring to the rapid changes in the global economy and the increasing share of ICT businesses, Jahromi told the meeting, “Iran lacks an efficient plan for the sector. We do not have time to waste. We must hasten to catch up with global developments and strive to raise the tech sector’s share in the economy.”

>Red Tape

Jahromi went on to say, “To enable decent levels of growth, government oversight should be reduced and this (ICT) sector should embark on the road to deregulation.”

Drawing parallels, he noted, “In a place like Germany, in a few hours a business gets registered and starts operating. A similar procedure in our country takes over three months!”

The government has often been criticized by businesses and market observers for cumbersome rules and regulations. During the meeting, the chamber’s deputy director Pedram Soltani said, “One main hurdle in the way of ICT growth is the bloated government bureaucracy.”

After his appointment three months ago, Jahromi has bluntly talked about problems and solutions that the people and businesses have long waited to hear. If real change and verifiable growth is on the agenda, the 35-year-old minister should walk the talk.

Promises and pledges of turning things around, that too from those at the higher echelons of power, are good but not enough. What matters is delivery in the highly competitive and challenging international economic climate.

To borrow a line from the minister himself: we simply do not have time to waste.