Tethering or phone-as-modem (PAM) is the sharing of a mobile device's cellular data connection with other connected computers. It effectively turns the transmitting device into a modem to allow others to use its cellular network as a gateway for Internet access. The sharing can be done wirelessly over wireless LAN (Wi-Fi), Bluetooth, IrDA or by physical connection using a cable like USB. If tethering is done over Wi-Fi, the feature may be branded as a personal hotspot or mobile hotspot, and the transmitting mobile device would also act as a portable wireless access point (AP) which may also be protected using a password. Tethering over Bluetooth may use the Personal Area Networking (PAN) profile between paired devices, or alternatively the Dial-Up Networking (DUN) profile where the receiving device virtually dials the cellular network APN, typically using the number *99#.

Many mobile devices are equipped with software to offer tethered Internet access. Windows Mobile 6.5, Windows Phone 7, Android (starting from version 2.2), and iOS 3.0 (or later) offer tethering over a Bluetooth PAN or a USB connection. Tethering over Wi-Fi, also known as Personal Hotspot, is available on iOS starting with iOS 4.2.5 (or later) on iPhone 4 or iPad (3rd gen), certain Windows Mobile 6.5 devices like the HTC HD2, Windows Phone 7, 8 and 8.1 devices (varies by manufacturer and model), and certain Android phones (varies widely depending on carrier, manufacturer, and software version).

For PCs, Windows added support for USB tethering devices since Windows 7.

For IPv4 networks, the tethering normally works via NAT on the handset's existing data connection, so from the network point of view, there is just one device with a single IPv4 network address, though it is technically possible to attempt to identify multiple machines.

On some mobile network operators, this feature is contractually unavailable by default, and may be activated only by paying to add a tethering package to a data plan or choosing a data plan that includes tethering. This is done primarily because with a computer sharing the network connection, there is typically substantially more network traffic.

Some network-provided devices have carrier-specific software that may deny the inbuilt tethering ability normally available on the device, or enable it only if the subscriber pays an additional fee. Some operators have asked Google or any mobile device producer using Android to completely remove tethering capability from the operating system on certain devices. Handsets purchased SIM-free, without a network provider subsidy, are often unhindered with regard to tethering.

There are, however, several ways to enable tethering on restricted devices without paying the carrier for it, including third-party USB tethering apps such as PDAnet, rooting Android devices or jailbreaking iOS devices and installing a tethering application on the device. Tethering is also available as a downloadable third-party application on most Symbian mobile phones as well as on the MeeGo platform and on WebOS mobiles phones.

Depending on the wireless carrier, a user's cellular device may have restricted functionality. While tethering may be allowed at no extra cost, some carriers impose a one-time charge to enable tethering and others forbid tethering or impose added data charges. Contracts that advertise "unlimited" data usage often have limits detailed in a fair usage policy.