Data Centers in Tehran
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Tehran – Iran's Primary Digital Hub
Executive Summary
Tehran is the undisputed center of Iran's digital economy and the primary market for any organization needing to deliver low-latency services to its large population. While international connectivity presents challenges, colocation in Tehran provides the most effective access to local carriers, internet exchanges, and end-users. This market is essential for companies focused on capturing in-country digital services, e-commerce, and media delivery opportunities.
Tehran: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Reflects national infrastructure; connectivity is concentrated within the capital. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | Access requires network extensions to regional hubs like Dubai or Istanbul. |
| Power Cost | IRR 3,500.00 - 5,500.00/kWh | Sourced from a grid heavily reliant on fossil fuels. |
| Disaster Risk | High (6/10) – as of September 2025 | Significant seismic activity is the primary environmental concern for infrastructure. |
| Tax Incentives | No | Sanctions and regulations create a complex environment for foreign investment. |
| Sales Tax | 9% VAT – as of September 2025 | Standard value-added tax applies to most goods and services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality Tehran's connectivity ecosystem includes a mix of state-owned and private telecommunication companies, as of September 2025. True carrier-neutral facilities are limited, with most colocation services offered directly by the carriers themselves. This structure makes careful provider selection critical for achieving network redundancy.
Direct Cloud On-Ramps There are no direct, in-market cloud on-ramps from major hyperscale providers, as of September 2025. Businesses requiring dedicated cloud access must use private network extensions or IP transit to connect to cloud regions in nearby hubs, most commonly Dubai, UAE.
Internet Exchange Points (IXPs) The primary local internet exchange, the Tehran Internet Exchange Point (TEH-IX), is vital for localizing traffic. Peering at this IXP dramatically reduces latency for domestic users by keeping data within national borders, a key performance factor for content delivery.
Bare Metal Bare metal server options are available primarily through local hosting companies and regional providers. The offerings are geared toward serving the domestic market, providing raw server performance for applications that need to run outside of virtualized cloud environments.
Power Analysis
Average Cost Of Power Industrial power costs are estimated to be between IRR 3,500.00 - 5,500.00/kWh, as of September 2025. The national energy grid is over 95% powered by fossil fuels, with a small contribution from hydroelectric and nuclear sources. This reliance on conventional fuels influences both cost and environmental considerations for data center operations.
Power Grid Reliability The power grid serving the capital is the most developed in the country. However, data centers still require robust, on-site uninterruptible power supply (UPS) systems and backup generators to guarantee uptime, mitigating risks from potential grid instability.
Market Access, Business & Tax Climate
Proximity To Key Business Districts Data centers in Tehran are strategically located to serve the country's main financial, governmental, and commercial districts. This proximity is critical for financial services, media companies, and enterprises that require minimal latency for their core operations.
Regional Market Reach As the capital and largest city, Tehran serves as the anchor for reaching Iran's 88 million people. Digital infrastructure deployed here offers the best possible performance for serving the country's significant and growing online population.
Tax Advantage For Data Centers There are no specific tax incentives designed to attract data center investment. The business and tax climate is complex, particularly for foreign entities, due to international sanctions and local regulations.
Natural Disaster Risk
Tehran's overall disaster risk profile is classified as High, with a score of 6 out of 10, as of September 2025. The risk is driven almost entirely by natural hazards, with infrastructure vulnerability and coping capacity also playing a role.
Key natural risks for this market include:
- Earthquake: An extremely high-risk factor (9.3/10), as the city is situated near major fault lines.
- Coastal Flood: A high national risk (7.4/10), though it does not directly threaten the inland capital.
- River Flood: A significant risk (7.3/10) due to seasonal weather patterns affecting local river systems.
- Drought: A notable risk (6.5/10) that can impact water resources and power generation capacity over the long term.
