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Business News Today: Latest Business News, Finance News

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The Hormuz digital chokepoint: How does Iran war threaten...
By Reuters · 2026-04-28 · via Business News Today: Latest Business News, Finance News
Subsea cables ​are fibre-optic or electrical cables laid on the sea floor to transmit data and power. They carry ⁠around 99% of the world’s internet traffic, according to the ITU, the United Nations specialized agency for digital technologies.

Subsea cables ​are fibre-optic or electrical cables laid on the sea floor to transmit data and power. They carry ⁠around 99% of the world’s internet traffic, according to the ITU, the United Nations specialized agency for digital technologies. | Photo Credit: istock.com

Iran warned last week that submarine cables in the Strait of Hormuz were a vulnerable point for the region’s digital economy, raising concerns about potential attacks on critical infrastructure. The narrow waterway, already a chokepoint for ​global oil shipments, is equally vital for the digital world. Several fibre-optic cables snake across the seabed of the strait, connecting countries from India ‌and Southeast Asia to Europe via the Gulf states and Egypt.

WHAT MAKES UNDERSEA CABLES IMPORTANT?

Subsea cables ​are fibre-optic or electrical cables laid on the sea floor to transmit data and power. They carry ⁠around 99% of the world’s internet traffic, according to the ITU, the United Nations specialized agency for digital technologies.

They also carry telecommunications and electricity between countries, and are essential for cloud services and online communications.

“Damaged cables mean the internet slowing down or outages, e-commerce disruptions, delayed financial transactions ... ‌and economic fallout from all of these disruptions,” said geopolitical and energy analyst Masha Kotkin. Gulf countries, particularly the UAE and Saudi Arabia, have been investing billions of dollars in artificial intelligence and digital infrastructure to diversify their ‌economies away from oil. Both nations have established national AI companies serving customers across the region — all reliant on undersea ‌cables ⁠to move data at lightning speed.

Major cables through the Strait of Hormuz include the Asia-Africa-Europe 1 (AAE-1), connecting Southeast ⁠Asia to Europe via Egypt, with landing points in the UAE, Oman, Qatar, and Saudi Arabia; the FALCON network, connecting India and Sri Lanka to Gulf countries, Sudan, and Egypt; and the Gulf Bridge International Cable System, linking all Gulf countries including Iran. Additional networks are under construction, including a system led by ​Qatar’s Ooredoo.

WHAT ARE THE RISKS?

While the total length ‌of submarine cables has grown considerably between 2014 and 2025, faults have remained stable at around 150–200 incidents per year, according to the International Cable Protection Committee (ICPC). State-sponsored sabotage remains a risk, but 70–80% of faults are caused by accidental human activities — primarily fishing and ship anchors, according to the ICPC and experts.

Other risks include undersea currents, earthquakes, subsea volcanoes, and typhoons, ‌said Alan Mauldin, research director at telecom research firm TeleGeography. The industry addresses these by burying cables, armouring ​them, and selecting safe routes, he said. The Iran war, nearing the two-month mark, has brought unprecedented disruption to global energy supply and regional infrastructure, including hits to Amazon Web Services data centers in Bahrain and ⁠the UAE. Subsea cables have been spared so far.

However, an indirect risk exists from damaged vessels inadvertently hitting cables by dragging anchors.

“In a situation of active military operations, the risk of unintentional damage increases, and the longer this conflict lasts, the higher the likelihood ‌of unintentional damage,” Kotkin said. A similar incident occurred in 2024, when a commercial vessel attacked by Iran-aligned Houthis drifted in the Red Sea and severed cables with its anchor.

The degree to which damage to the cables might impact connectivity in Gulf countries depends largely on how much individual network operators rely on them and what alternatives they have, according to TeleGeography.

NO EASY FIX Repairing damaged cables in conflict zones poses a separate challenge to securing them. While the physical repair itself is not overly complicated, decisions by repair vessel owners and insurers may also be impacted by the risk of damage from fighting or the presence of mines, ‌experts say.

Permits to access territorial waters add another layer of difficulty. “Often one of the biggest problems with doing repairs is you have to get ​permits into the waters where the damage is. That can take a long time sometimes and can be the biggest source (of problems),” Mauldin said.

Once the conflict ends, industry players will also face the challenge of ⁠re-surveying the sea floor to determine safe cable positions and avoid ships or objects that may have sunk during hostilities, he said.

WHAT ALTERNATIVES ⁠ARE THERE IF SUBSEA CABLES FALTER?

While potential damage to subsea cables would not cause a complete connectivity loss — due to land-based links — experts agree that satellite systems are not a feasible replacement, as they cannot handle the ‌same volume of traffic and are more expensive.

“It’s not as though you could just switch to satellite. That’s not an alternative,” Mauldin said, noting that satellites rely on connections to land-based networks and are better suited for things in motion, ​like airplanes and ships.

Low-Earth-orbit networks such as Starlink are “a boutique solution, which is not scalable to millions of users, at this time,” Kotkin added.

Published on April 28, 2026