Iran-Israel War: Potential Impact on Global Telecommunications and Internet Costs
The ongoing conflict between Iran, Israel, and the United States, now in its third week as of March 16, 2026, has the potential to disrupt global economic stability, and, impact the telecommunications industry. While Indonesian cellular operators have not yet experienced direct effects, prolonged conflict could lead to increased internet rates and investment costs, according to industry experts.
Current Stability and Potential Risks
As of March 13, 2026, the Indonesian telecommunications industry remains relatively stable despite the geopolitical situation. Merza Fachys, Director & Chief Regulatory Officer of XLSmart, expressed hope for a swift resolution to the conflict, stating, “So far, hopefully nothing will happen. We certainly hope that this war will stop soon.”1 Currently, Indonesian telecommunications operators have not seen disruptions to network operations or services.
Currency Fluctuations and Investment Costs
However, a prolonged conflict could trigger global economic turmoil, impacting currency exchange rates. A significant portion of telecommunications investment relies on imported components purchased with foreign currency. Fachys warned, “If a situation like this continues, currency values usually rise. Meanwhile, almost all telecommunications investment uses foreign currency, due to the fact that many network devices are still imported.”1 An increase in exchange rates would raise operator investment costs for network equipment and infrastructure development, potentially impacting long-term cost structures.
Impact on Consumer Purchasing Power
Global economic instability could also affect consumer purchasing power. Reduced disposable income may lead to decreased consumption of telecommunications services. Fachys noted a similar pattern during previous international conflicts that triggered economic crises, stating, “We have experienced times like that. If a crisis occurs, fuel prices rise, food prices are expensive, everything goes up. In conditions like that, people will of course choose basic needs first.”1 Consumers may prioritize essential expenses like food and fuel over non-essential services like internet access.
Historical Precedent
Past economic crises have demonstrated a tendency for consumers to reduce spending on discretionary items, including telecommunications services, when faced with rising costs for basic necessities. As Fachys pointed out, “People will choose which is more important, buying rice or buying credit. Of course the stomach’s needs are the main thing.”1
Broader Conflict Context
The conflict escalated on February 28, 2026, with joint strikes by the United States and Israel targeting Iranian military assets and leadership, resulting in the death of Supreme Leader Ayatollah Ali Khamenei.2 Iran retaliated by targeting U.S. Military facilities and infrastructure in Gulf states.2 As of March 15, 2026, the conflict is in its 16th day, with both the U.S. And Israel indicating the war may continue for weeks.3 Donald Trump has stated Iran is ready to negotiate a ceasefire, but the terms are currently unacceptable.1, 3
Looking Ahead
The telecommunications industry is closely monitoring the situation, hoping for a swift de-escalation of the conflict to prevent wider economic turmoil. The potential for increased costs and reduced consumer spending highlights the interconnectedness of global events and their impact on essential industries.
- Fachys, Merza. Director & Chief Regulatory Officer of XLSmart. Interview, Jakarta, March 13, 2026.
- Center for Preventive Action. “Iran’s War With Israel and the United States.” Council on Foreign Relations, March 13, 2026, https://www.cfr.org/global-conflict-tracker/conflict/confrontation-between-united-states-and-iran.
- Times Now Digital. “Iran Israel War Live Updates: Trump to Reveal Soon Coalition Plan to Reopen Strait of Hormuz.” Times Now News, March 16, 2026, https://www.timesnownews.com/world/middle-east/iran-us-israel-war-live-updates-iran-us-news-escalates-middle-east-tensions-today-latest-news-liveblog-153815132.
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