Cuts and Extensions in Iran's ICT 2017/18 Budget

In President Hassan Rouhani’s budget for the next fiscal year (starts in March 2017), which was presented to the Majlis last week, the telecoms sector is likely to get a cut, initial reports show.

The budget allocated to the Ministry of Communications and Information Technology (and all affiliated organizations) has been set at 3.2 trillion rials ($80.1 million). In other words the overall budget will decrease by 16.5% compared to this Iranian year, Financial Tribune’s sister publication Donya-e-Eqtesad reported.

The lion’s share of the telecom budget (80%) has been earmarked for the ministry itself and the Iranian Space Research Center.

The Iran Space Agency will see a 35% increase compared to this year; thus ISA will receive 180 billion rials ($4.6 million) in the coming year.

Furthermore, the budget earmarked for the National Center for Cyberspace has seen a 45.5% increase compared to this year. It will get 49 billion rials ($1.2 million).

Revenues

Aside from the usual funding the ICT sector relies on, such as money raised from patenting, two items from which the industry will raise money in the coming year stands out among the rest.

First, the government’s income from electronic services will increase by 37.5%. For instance, the government expects to make 6.5 trillion rials ($166 million) from digitizing national ID cards and driver’s licenses. Both processes are mandatory for all Iranians.  

Also the price of text messages will increase by 10 rials ($0.0003) in the next calendar year. The government has predicted that revenues raised from this source will amount to an additional 4 trillion rials ($103 million).

With the penetration of 3 and 4G Internet and the increasing popularity of online messaging applications, less mobile users are using text messages for communication. To make up for the revenue deficit, the ICT ministry has been gradually increasing the price of text messages over the past two years.   

Revenues from this source will be allocated to the Iranian Red Crescent Society, the State Welfare Organization and Imam Khomeini Relief Committee. No explanation is provided as to why revenues from SMS price rise will be allocated to these three organizations.

Budget Cuts

The bill shows a contractionary fiscal policy, specifically in the case of the organizations directly affiliated to the government.

Organizations that will see significant funding cuts in the coming year are the Post Company (-32%) the Communications Regulatory Authority (-27%) and the Telecommunications Infrastructure Company; the CRA is to receive 583 billion rials ($15 million).

Other areas in science and information technology eligible for funding in the proposed budget include computer game development, E-governance and the National Information Network.

The NIN was officially launched in August as an alternative independent network with content that is compatible with Islamic values.

E-governance is the application of information and communication technology for delivering government services, exchange of information and communication transactions.