I have been having that problem for 6 months and my IT guy finally found a solution by mining the web. I don't know the source of the answer to give credit but it works !
Text of blog posting below:
t does, thanks! I was getting really frustrated with connecting my iPad to my 4S via Personal Hotspot. After a fresh boot of the phone it would work as expected but if the connection was terminated (say by switching hotspot off and on) or after the two hadn't been connected for a while it got into this state where I could see and connect to the hotspot but it would drop a few seconds later then try again over and over.
After a lot of experimenting I finally figured out that there seems to be a pretty serious bug in the hotspot's DHCP server. AP discovery and WPA authentication work great but in this weird state the iPhone will not give the connecting device an IP. The only solution to fix the DHCP server is to reboot the phone.
That being the case, grasshoppertrekker's advice is bang on - you need to give the connecting device a static IP address. This gets around the DHCP issue.
For the less technically inclined, here's how to do that with an iPad:
- Reboot your phone and connect to the hotspot as usual and ensure the connection works
- On the iPad go to Settings - WiFi and tap the arrow to the right of your iPhone's name
- Write down all the values you see under the DHCP tab
- Tap the Static tab (or Manual)
- Enter in the same values you just write down
- Hit "WiFi Networks" at the top to go back
The iPad will now reconnect using the same settings as DHCP would have given it, but without relying on the broken DHCP server.
Optional extra: Instead of using whatever DNS values the DHCP server (and by extension your mobile data ISP) gives you, use OpenDNS IP's instead. This will speed up YouTube due to their partnership with Google and prevent your ISP from traking your web usage via DNS interception. To do this enter the following into the DNS field under the Static tab: 208.67.222.222,208.67.220.220 (note the comma)