A market for Iraqi SIM cards has emerged in towns along Iran's western border as restrictions on international internet access push traders and residents towards foreign mobile networks to reach messaging apps, Iranian daily Iran reported on May 18.

Signals from Iraqi operators reach up to two kilometres inside Iranian territory at some border points, allowing users to access WhatsApp, Telegram and other social networks blocked or disrupted by domestic restrictions.

Internet restrictions trace to the recent conflict between Iran, Israel and the United States, during which Iranian authorities imposed sweeping curbs on international connectivity citing security concerns. 

The relative cheapness of the cards compared with the cost of circumvention tools has been cited as one reason for the shift.

The main buyers are traders and merchants in provinces neighbouring the border, who rely on the connections to send and receive financial documents, payment receipts and images of import and export goods in daily dealings with Iraqi counterparts.

In Khouzestan province, the trade is most active, with Iraqi signals offering better coverage in border towns and reaching two kilometres into Iranian territory.

Naeem Ahmadi, public relations director of the Khouzestan governorate, said the phenomenon reflected efforts by the commercial community to work around the disruption.

"For traders, merchants and economic operators working at border points such as Shalamcheh, Chazabeh, Khorramshahr, Arvandkenar and Mino Island, the internet is not a luxury but a work tool. With outages or restrictions on the international network, financial processes, order registration and logistics coordination with Iraqi parties are disrupted," Ahmadi said.

Ahmadi said the use of foreign SIM cards was a low-cost yet strategic choice that sent a message to communications policymakers, adding that residents with relatives across the border were also turning to the cards to maintain contact.

The official said the practice carried risks from a security standpoint. "Using another country's SIM cards on Iranian soil is a temporary solution to communication challenges, but from the perspective of passive defence and network security it is not without danger, and can lead to information leakage, weakening of sovereign cyber oversight and frequency interference," Ahmadi said.

The trend extends to Kermanshah province. Mohammad Shafiei, governor of Qasr-e Shirin, said the use of Iraqi operator SIM cards was mainly confined to traders, cargo owners, transit drivers and border economic operators, rejecting claims of widespread public adoption.

"Contrary to some narratives, widespread public use of Iraqi SIM cards among the citizens of Qasr-e Shirin is not accurate, and the matter is mainly linked to specific groups of economic operators," Shafiei said.

Ali-Akbar Varmaghani, political, security and social deputy of the Kurdistan governor, said the buying and selling of Iraqi SIM cards had no official basis or mechanism, while noting that limited use in border areas was not new.

"In cities such as Marivan and Baneh, where part of economic and commercial activity is tied to Iraqi Kurdistan, some operators in trade, transport and exports use Iraqi operator lines to facilitate communications," Varmaghani said.

He said the use of one Iraqi operator's lines had become limited in some areas after Iranian forces fired on 4G masts previously fired across the border. 

Nejad Jahani, governor of Marivan, said the cards had no effective signal inside the city itself and their use was largely confined to areas close to the border.

The Iran Blockchain Association has estimated losses to the digital economy of between IRR3 quadrillion and IRR7 quadrillion ($1.66bn to $3.88bn) over roughly 70 days of disruption.