3 Steps
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Please ensure that at Cellular Data is ON under Settings----->General----->Network.
Under Settings, switch Personal Hotspot to ON.
Your phone is now in discoverable mode and you can share the Phone Name and password so your friends can connect to it via WiFi.

How to share 3g or gprs connection on the iphone

Sharing a 3G or GPRS connection is a good idea if you want to save on data roaming costs. Your "local" friends can share their unlimited data connection with you.