Personal hotspot appears on unlocked iPhone 4, but will not work.

AT&T unlocked my old iPhone 4 (I got an iPhone 5 for myself). I verified it was unlocked using a relative's T-Mobile micro-SIM. I sold the iPhone 4 to a friend. My friend is using it with a micro-SIM from Straight Talk.

The "Personal hotspot" option is available. When we enable it, the WiFi network never as shows up in the WiFi network list on my iPad mini. We've tried everything:

- Enable / disable personal hotspot repeatedly (my brother has to do this on his iPhone).

- Full restore, set up as new phone (did not restore from backup).

- Reset network settings.

- Toggled Airplane Mode, WiFi, and Bluetooth multiple times (always testing with WiFi+Bluetooth enabled on both devices).

The iPhone never appears in the WiFi networks list on the iPad, except briefly only once. That time, I tapped and it never connected and never asked for a network key.

The iPhone *does* appear in the iPad's Bluetooth menu. When I try to pair them that way, both show the same pairing key, but they will not connect. I've tried "forget device" multiple times and it still won't connect after pairing.

The iPhone connects to home WiFi and works just fine. We've even tested multiple FaceTime calls. Both devices are using 6.0.1 (unmodified, no jailbreak).

If the service provider restricts tethering, the option should not appear. If the option is here, why won't it work?

Can anyone shed some light on this problem? Thanks!