Correctional Services spokesman Manelisi Wolela has denied allegations that student leader Mcebo Dla.
MTN stands to lose at least a month's revenue in Iran - its third largest market - after its government blocked cellular network signals.
Faced with mounting protest following the country's disputed presidential elections, the government has targeted various websites which disseminate footage and information on demonstrations and street clashes to the outside world.
Those affected include Facebook, Twitter, BBC Farsi and pro-opposition sites. Reports out of the Middle East country say cellular networks have also been affected.
The Iranian government reportedly acquired a Nokia Siemens scrambling system during the elections that would allow it to monitor and control local phone calls.
MTN, a 49percent shareholder of MTN Irancell, yesterday declined to comment. Group spokesperson Nozipho January-Bardill said: "MTN has no comment regarding its operations in Iran at this stage."
Iran is MTN's biggest market after South Africa and Nigeria, serving about 16million Iranians over a network covering about 62percent of the country.
Iran generated R1,2billion revenue for MTN in the past financial year.
According to an Associated Press report, text messaging, a primary source of spreading information in Tehran, has not been working since two weeks ago.
Cellphone service in the capital city is frequently down and foreign news organisations have been restricted from reporting on the streets of the city.
Like Nigeria, Iran is expected to soon surpass South Africa - where the market has been virtually saturated.
Analysts said MTN would continue with its silent approach as it has done in other politically unstable economies such as the Sudan.
Lindsey McDonald, ICT analyst from Frost & Sullivan, said: "MTN will want to keep the government happy since Iran is one of the its biggest markets; they would rather lose market share than be kicked out."