From collapse to coordination: Gaza’s informal digital economy and the future of Palestinian socio-economic resilience

By the time Gaza entered 2026, the numbers told a story that headlines could not contain. The Palestinian Central Bureau of Statistics reported that 64 per cent of mobile towers were out of service. Paltel, the territory’s largest operator, had lost roughly 80 per cent of its more than 500 cell towers. 

The telecommunications sector’s market value collapsed by 89 per cent in a single year, from 13 million dollars in 2023 to just 1.5 million in 2024. In Rafah, mobile coverage sank from near-universal access to just 27 per cent. Reconstruction of the sector alone is now estimated at a minimum of 90 million dollars, with total losses exceeding half a billion.

These figures describe a deliberate, systematic dismantling of Palestinian connectivity. They do not describe collateral damage.

Since the siege began in 2006, Israel has repeatedly bombed transmission stations, restricted the import of fibre optic cables and confined Gaza to outdated 2G mobile technology while permitting 4G in the occupied West Bank.

The June 2025 blackout, which left more than two million people digitally isolated for three consecutive days, was not an anomaly. It was the logical extension of a policy that treats Palestinian communication as a privilege to be switched off at will.

And yet, somehow, Gaza stayed online. A new case study published in January 2026 by the Palestine Economic Policy Research Institute, in partnership with Global Communities and funded by the Swedish government, documents how. It is a story that deserves far wider attention than it has received, because it rewrites what we think we know about digital resilience under occupation.

When formal infrastructure collapsed, a sprawling network of informal internet service providers, or ISPs, stepped into the void. These were not tech unicorns or humanitarian start-ups. They were neighbourhood operators running rooftop antennas, displaced engineers rebuilding networks from inside tents, and reseller cooperatives that had previously operated at the margins of the licensed market. 

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One mid-sized provider in southern Gaza scaled from serving 80 households to more than 400 users within days of the formal network’s collapse.

Two displaced engineers, Khalil and Hisham, rebuilt entire micro-networks from salvaged routers, community-donated batteries and a single solar panel mounted on a wooden stand. Customers paid in whatever they had: e-wallet transfers, food, fuel, or simple barter.

What emerged was not chaos. It was governance. A reseller-based operator called New StarMax began imposing unified pricing ranges, bandwidth allocation rules and shared troubleshooting practices across its downstream network. Compliance was voluntary but nearly universal, because the alternative was collective failure. 

Eventually, Paltel’s own Almubadra initiative formalised this bottom-up coordination, offering low-cost upstream bandwidth to informal networks that met minimum service and pricing standards. In one of the most instructive hybrid models to emerge from any crisis in the region, a licensed incumbent and a constellation of unlicensed operators built a functioning telecoms sector together.

Beneath this connectivity layer, an entire digital economy reorganised itself. Micro, small and medium enterprises, which the United Nations Development Programme estimates comprise 98 per cent of Palestinian businesses, abandoned their destroyed physical storefronts and migrated to WhatsApp broadcasts, Facebook posts and low-resolution photo catalogues. Women-led home businesses, like the food producers Balaha and Zaitona, pivoted from formal e-commerce campaigns to direct-to-shelter sales coordinated through informal delivery runners. 

A neighbourhood grocer whose shop was destroyed early in the war turned his phone into a storefront, sourcing from whichever wholesaler still had stock and dispatching orders through relatives and volunteers.

None of this would have functioned without digital payments.

With banks offline, ATMs destroyed and cash almost impossible to find, e-wallets became Gaza’s emergency financial infrastructure.

PalPay, supported by locally hosted servers and flexible Know Your Customer protocols adjusted for crisis conditions, processed the transactions that kept households fed and micro-enterprises solvent. In some neighbourhoods and displacement sites, a closed-loop digital economy took shape, with funds circulating peer-to-peer because there was no physical cash to withdraw them into. 

Freelancers, the backbone of Gaza’s pre-war youth employment and the country’s window into global labour markets, clustered around the rare access points provided by informal ISPs. They compressed files, downgraded deliverables and relied on payment brokers in Amman, Cairo and the Gulf to receive what remained of their international earnings. 

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A 7amleh (the Arab Center for the Advancement of Social Media) survey of 183 Gaza-based digital workers, 81 per cent of whom are aged 18 to 34 and 72 per cent of whom are displaced, found that most had lost over half their income. That so many kept any income at all is a quiet miracle built on improvised antennas and shared chargers.

This is not a story about Silicon Valley-style innovation. It is a story about what happens when a population refuses to be disconnected from the world, even as the world looks away. Gaza’s digital ecosystem did not survive because it was sophisticated. It survived because it was decentralised, community-embedded, and forgiving of failure.

Centralised infrastructure breaks catastrophically. Mesh networks bend.

The implications for reconstruction are urgent, and they cut against the grain of the dominant rebuilding narratives now circulating in Davos and Washington. Plans that envisage Gaza as a glittering “Riviera” of luxury towers and gleaming transport hubs, or that imagine telecoms recovery as a clean rebuild of a centralised national grid, miss the lesson that Gaza’s own digital workers have already taught. 

Resilience in a territory subject to repeated, deliberate infrastructure destruction cannot be engineered from the top down. It must incorporate, formalise and resource the informal systems that have already proven they can function under siege.

That means lightweight licensing pathways for informal ISPs, not their criminalisation. It means equipment support, solar power kits and simplified reseller agreements, modelled on Almubadra. It means investment in e-wallet agent networks, liquidity pools and QR-based MSME integration. It means solar-powered co-working hubs for freelancers, fee waivers from global platforms like Upwork and Fiverr, and targeted support for women-led micro-enterprises whose adaptability has carried entire households through displacement. 

The European Bank for Reconstruction and Development has pledged 5 billion euros for conflict-affected economies in 2026, and the EU’s Palestine Economic Resilience programme runs through the same year. How that money is spent will decide whether Gaza’s digital future resembles its improvised present or its vulnerable past.

The deeper point is political. For nearly two decades, Israel has used Gaza’s telecoms infrastructure as a pressure valve, tightening and releasing it at will. The informal networks that emerged are not merely technical workarounds. They are an act of collective refusal, a declaration that communication is a right rather than a concession. Any serious reconstruction strategy, and any credible international response, must begin from that premise.

Gaza did not wait for permission to come back online. Its reconstruction should not wait for permission either.

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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.