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I believe they cannot allow tethering with the iPhone since the iPhone its self doesn't allow tethering unless Apple unlocks it.

So they might need to pay Apple some £££ to get the ability to simply unlock tethering for GiffGaff's users.

I suspect that an jail-broken iPhone could tether on GiffGaff just fine.

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Why would Apple want to restrict tethering? It is the carriers that want to restrict it in order to continue charging differently for different bits on the wire.

Apple obviously provide the infrastructure for enabling/disabling tethering but I cannot see how it is in their interest to discourage it, except to keep the carriers happy.

It's the carrier that disables tethering based on the network profile. An unlocked iPhone can tether just fine out of the box, until you put a SIM card in that doesn't allow it.

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