TEHRAN — Iran may face increasing economic isolation due to U.S. sanctions, but millions of Iranians stay connected to the world through social media, despite attempts by the regime to restrict the access of a young, tech-savvy population.

Iranians told NBC News' Lester Holt, who reported from the capital Tehran this week, that they turn to social media to learn what's happening in the world, to chat with friends and to promote their businesses, even if it means skirting government restrictions.

"People have access to all sorts of social media, satellite channels," said Ali, a 36-year-old Iranian man clad in a T-shirt and jeans, who spoke to Holt at a trendy coffee shop. "And they're getting news from different places that they need to get."

Zahra Hatami, a make-up artist, said social apps help her reach prospective customers and that "Instagram is a very good tool to promote my business."

Internet access, speeds and bandwidth have dramatically increased in recent years in Iran. The number of internet users grew 29 percent in 2018, the fifth biggest increase in the world, according to a report by Datareportal.

Make-up artist Zahra uses Instagram to reach prospective customers. NBC News

The government, however, has long been wary of digital technology, recognizing its economic benefits but fearing it could help fuel protests like the mass demonstrations that erupted in 2009. After street protests last year, the regime's judiciary banned the popular Telegram messaging service, which was used by an estimated 40 million Iranians, or roughly half the country's population.

While Facebook and Twitter are officially blocked, authorities allow Iranians to use Instagram and Pinterest. But even for apps that are banned, many Iranians bypass the limits by using proxies or virtual private networks, or VPNs, which hide the location of a user.

The restrictions have not stopped Iran's leaders from using Twitter, including Supreme Leader Ali Khamenei, President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif, who often use the platform to outline the country's foreign policy and spar with the Trump administration.

Iran's communications minister, Mohammad Jahromi, is an avid Twitter user, and he said he believes the country needs a more open approach to digital media.

Iran's Communications minister Mohammad Javad Azari Jahromi at his office in Tehran. Vahid Salemi / AP file

"My very good use of Twitter indicates that I don't believe in its use being limited or prohibited," the minister told NBC News.

But his stance puts him at odds with more conservative figures in the regime and the judiciary, who have pushed for censorship and limits on social media based outside the country.

President Rouhani sharply criticized the judiciary for banning the Telegram service last year, calling the move "the direct opposite to democracy." In his re-election campaign two years ago, Rouhani heavily relied on Instagram to reach voters as he received only limited coverage by state-run television.

Jahromi, the communications minister, said restrictions on social media were counterproductive, undermining Iran's political and economic interests.

"We have to admit the fact that we have weakness in this field," Jahromi said.

Asked by Holt if Iran was losing the "propaganda war," the minister said: "Yes, we have lost it."

In the wake of the mass protests of 2009, the regime vowed to build a domestic internet, or "national information network," with the aim of diminishing the reach of foreign-based sites and enhancing the government's ability to control the flow of information. The project is still under development with mixed results so far.

After authorities banned Telegram in April 2018 on national security grounds, officials have pushed the development of domestic messaging apps, which are subject to the country's strict laws limiting freedom of expression.

Jahromi and other officials also say digital technology is crucial to the country's economic future, especially as sanctions imposed by President Donald Trump have slashed revenues from oil exports.

Snappfood, a domestic Iranian app that is similar to Western food delivery apps. NBC News

The far-reaching sanctions introduced by Trump have spooked foreign investors and prompted many Western firms to shy away from the Iranian market. Apple has cut off Iranians from its popular apps store, a move that undercut the country's budding tech sector.

As a result, Iranian entrepreneurs — often with funding from the government — have come up with homegrown versions of Western apps. There is an alternative ride-hailing app similar to Uber, another for food delivery, and a local version of Amazon.

Human rights groups have raised concerns about the domestic apps that fall under Iranian laws, saying the services could endanger privacy and stifle free speech.

But Jahromi said new Iranian e-commerce symbolized the country's resilience in the face of sanctions imposed by the Trump administration.

"Today we have start-ups focusing on e-payment and online taxis like Uber, which are making significant progress in the field," Jahromi said. "The sanctions made the Iranian people more self-reliant, to be able to develop things on their own that they might not otherwise be able to get."

Ali Arouzi reported from Tehran. Dan De Luce reported from Washington, D.C.