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Tethering vs. Hotspots: What's Better for Your Business?

Jeff Hale
Jeff Hale

Do you know the difference between tethering and mobile hotspots?

The biggest business trend of the decade is the collective shift from the traditional office setting, a change that's greatly increased our reliance on mobile internet technology for fast and reliable broadband connections on the go. Whether you're building a new home office, participating in conference calls from your backyard, or trying to stay connected with your team while you're on the road, understanding the differences between tethering and hotspots is essential.

Both types of mobile-based technologies are capable of providing high-speed internet access when and where you need it, but the biggest difference between tethering and hotspots is the hardware you'll need. With tethering, you can use your existing mobile phone and data plan to share a secure internet connection with another device, typically a laptop or tablet. With true hotspots, you have access to a dedicated device, like a portable Wi-Fi hotspot, that's capable of connecting to the closest cellular tower. Both options have their pros and cons for business use, which you should consider before choosing the best option for you or your company.

The phrase "hotspot" is used interchangeably when discussing phone tethering and hotspot devices. While smartphones can be equipped to act as a hotspot, their performance and capabilities are lacking compared to dedicated hotspot devices that require a separate wireless service plan to function.

What is phone tethering?

Phone tethering allows anyone with a relatively new smartphone and data plan to share their internet service with laptops, tablets, or other devices connected through either Wi-Fi, Bluetooth, or a USB cable. Since most smartphones and data plans include tethering services, setting up a secure Wi-Fi hub with your phone to draft a quick email or send a small document from your laptop is easy and efficient. It's always a better option than using public Wi-Fi.

For occasional use without the need to tether multiple devices or transfer large amounts of data, phone tethering or personal hotspot wireless networks ‒ not to be confused with the mobile hotspot devices we'll explore later ‒ are an excellent way to get work done when you're out of the office. But for consistent use with business travel, phone tethering is probably not the best option for you or your employees. [Read related: Mobile Hotspot or Satellite Internet: Which Is Right for Your Business?]

Pros and cons of tethering for businesses

Any devices connected through your mobile phone will share your cellular network's speed, reliability and data limits, making it a convenient option for many businesses that don't want to invest in dedicated mobile internet hardware for out-of-the-office use. Check the fine print on your unlimited wireless data plan, as many service providers set low data caps for use during mobile tethering.

Using your phone to create a "personal hotspot" on iOS or a "Wi-Fi hotspot" on Android demands a great deal more power than normal mobile use, draining your phone's battery life at a rapid pace. And if your wireless service provider limits shared data, they'll likely reduce your speed as you reach your data cap. If you're not careful, you can easily use a month's worth of data in a single afternoon when sharing data for a video conference.

Before you enable your phone's hotspot feature, check your data allowance to guarantee you're not surprised by any potential overages.

Setting up a secure personal hotspot on iOS

  1. Navigate to your Settings menu.
  2. Select Cellular.
  3. Select Personal hotspot.
  4. Toggle the "Allow Others to Join" button
  5. Set your Wi-Fi Password.
  6. Connect to your personal hotspot using Wi-Fi, Bluetooth or USB tethering.

Setting up a secure Wi-Fi hotspot on Android

  1. Navigate to your Settings menu.
  2. Select Network & internet.
  3. Select Hotspot & tethering.
  4. Tap on Wi-Fi hotspot.
  5. Toggle the On button.
  6. Set your hotspot password.
  7. Connect to your Wi-Fi hotspot.

What is a mobile hotspot?

A portable Wi-Fi or dedicated mobile hotspot is essentially a wireless router that connects to your service area's cellular tower, providing multiple Wi-Fi-enabled devices with always-on access to broadband internet speeds. Unlike the tethered hotspots you can create through your mobile phone, these dedicated mobile hotspots provide high-speed LTE network coverage to as many as 15 devices. And because they're designed and built for one purpose ‒ connecting numerous devices to the internet ‒ they offer a lot more in terms of hardware and performance than a standard smartphone.

All of the major wireless network providers, such as Verizon, AT&T, and T-Mobile, offer devices from multiple manufacturers and service plans with a range of speeds, data allowances, and pricing. You can expect to spend somewhere around $250 for a high-quality mobile hotspot device and between $45 a month and $200 per month for the data plan. But if you need to provide broadband internet access to multiple devices or host a successful virtual conference while away from your standard business internet service with any regularity, consider investing in a dedicated mobile hotspot device with a sufficient data plan.

Pros and cons of a mobile hotspot for businesses

Upfront and recurring expenses, along with the minor inconvenience of charging and carrying an additional piece of hardware, are the only real drawbacks of mobile hotspot devices compared to phone tethering. If you can justify the expense and don't mind adding a pocket-size piece of technology to your laptop bag, you'll be a much happier and more productive digital nomad working online with a dedicated mobile hotspot at your side or plugged into your laptop's USB port.

Battery life is the most important factor when choosing a hotspot device. Today's internet devices have room for large lithium-ion batteries that can broadcast Wi-Fi on battery power for 24 hours, offering a day's worth of continuous service compared to a couple of hours with phone tethering. Battery time decreases with heavier data use, however, especially when connecting to 10 or more devices.

Speed is the second standout feature. Most dedicated hotspot devices offer 5 GHz and 2.4 GHz bands simultaneously to optimize speed and connection quality, something that's especially important when multiple devices are connected and transferring data at the same time. Mobile hotspots are designed to serve a single purpose of connecting to the internet, and as a result, their large antennas offer a much better connection than the hardware found inside a mobile phone. Speeds vary by carrier and price, but you can expect to see up to 50 Mbps with the best models and data plans.

Security and administrative controls are also an improvement over phone tethering. Many mobile hotspot devices are VPN-friendly or come with an auto-VPN feature for a connection that's always secure. When sharing internet access with other devices, you'll be able to customize what can be seen in guest networks, track how much data is being used by each connected device, and adjust your guests' access credentials to stay in control of your connection.

When considered for regular and recurring business purposes, it's difficult to argue against the use of a dedicated mobile hotspot over phone tethering.

Image Credit: Julio Ricco / Getty Images
Jeff Hale
Jeff Hale
business.com Contributing Writer
Jeff Hale is a writer and editor based in San Diego with a background in business development and marketing. He has identified new market opportunities for Fortune 500 companies and developed communications strategies and digital branding for tech startups and small businesses. Jeff covers emerging technologies and business solutions with a focus on efficiency and growth. He holds a Bachelor’s degree in English from the University of California, Irvine, and an MBA from Chapman University.