Data Centers in Tehran
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Tehran – Strategic Hub for Domestic Digital Services
Tehran serves as Iran's primary digital infrastructure hub, concentrating the country's colocation and connectivity resources. This market is essential for any organization aiming to deliver low-latency services to Iran's large domestic population. Deploying in Tehran provides the most direct access to local eyeball networks and enterprise users, which is critical for performance-sensitive applications.
Tehran: At A Glance
| Factor | Rating / Data | Notes |
|---|---|---|
| Global Connectivity Grade | B | Good domestic connectivity, but limited international peering and carrier diversity. |
| Direct Cloud On-Ramps | 0 – as of September 2025 | The nearest major cloud hubs are in the UAE; access requires terrestrial networks. |
| Power Cost | IRR 1,500.00 - 2,500.00/kWh | Industrial power pricing is heavily subsidized, offering low operational costs. |
| Disaster Risk | High (6.7/10) – as of September 2025 | Significant seismic risk is the primary concern for infrastructure resilience. |
| Tax Incentives | No | No specific incentives for data centers. Operations are subject to standard regulations. |
| Sales Tax | 9% VAT – as of September 2025 | A standard Value Added Tax applies to most goods and services. |
Network & Connectivity Ecosystem
Carrier Density & Carrier Neutrality: As of September 2025, the market contains approximately four data center operators. True carrier neutrality is limited, with most connectivity flowing through state-owned or state-affiliated telecommunication providers.
Direct Cloud On-Ramps: There are no public cloud on-ramps located in Iran, as of September 2025. Access to hyperscale cloud providers like AWS, Google Cloud, or Microsoft Azure requires routing traffic internationally to major hubs in the United Arab Emirates or Turkey. This can be achieved through dedicated private network extensions.
Internet Exchange Points (IXPs): The primary exchange point is the Tehran IXP, which facilitates the majority of domestic traffic peering. Using this IXP is crucial for reducing latency and transit costs for services targeting Iranian end-users.
Bare Metal: Bare metal server availability exists through local providers. These services are geared toward hosting domestic applications and content delivery where data sovereignty and low latency are key requirements.
Power Analysis
Average Cost Of Power: Industrial electricity rates are estimated to be between IRR 1,500.00 – 2,500.00/kWh, as of September 2025. These highly subsidized rates make power a very low component of overall operational expenditure for data centers.
Power Grid Reliability: The power grid in major commercial areas of Tehran is generally stable. However, data centers must still rely on comprehensive N+1 or 2N UPS systems and multiple backup generators with significant fuel reserves to guarantee uptime during potential grid disruptions.
Market Access, Business & Tax Climate
Proximity To Key Business Districts: Data centers in Tehran are strategically located to serve the city's central business districts, government institutions, and major universities. This proximity provides low-latency connectivity for the country's primary economic and administrative centers.
Regional Market Reach: A deployment in Tehran effectively serves the entire country of Iran. The city is the central node for nearly all national telecommunications traffic, making it the only viable location for nationwide service delivery.
Tax Advantage For Data Centers: There are no specific tax incentives designed to attract data center investment. The primary financial advantage comes from heavily subsidized industrial power rather than tax policy.
Natural Disaster Risk
Tehran has a High risk profile for natural disasters, with an overall score of 6.7 out of 10, as of September 2025. The risk is driven almost entirely by the region's high seismic activity, which requires that facilities be built to stringent earthquake-resistant standards.
Key natural hazards include:
- Earthquake: 9.3/10
- Coastal Flood: 7.4/10 (Primarily impacting the country's coastal regions)
- River Flood: 7.3/10
- Drought: 6.5/10
- Epidemic: 6.2/10
