Have you tried the SIM card in another phone? If you haven't I would suggest that you try this. If the same thing happens in another phone to me that would suggest a problem with the SIM card and I would suggest that you contact your network provider to send out a new SIM card.
If the same thing doesn't happen then could be an issue with the phone. I would suggest then that you contact your phones manufacturer to see about a repair.
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If it dials O.K., try pressing # and see if it turns on the DTMF pad. You could have pulse dial on outside calls enabled, and that would keep the keypad in pulse mode until it's told to send tones.
This is really only a guess. The type of dialing is programmed in CO trunks and it's possible it's been set to Call Blocking! It is designed to send pulse only and block the audio of DTMF so the CO won't get confused. You might start with changing the Type Dial to DTMF and test. If that doesn't work, try Pulse and test. Last, if that doesn't work, you will need to keep call blocking and try the # after dialing.
Please comment back if it does or doesn't work. We don't see much pulse dial around here.
The problem is possibly the keypad on the phone. Try another phone , preferrably a standard corded phone. If you still cannot break the dial tone, then the problem is with the telephone line (phone company)
Dial tone is OK, but can't dial out • Make sure the tone/pulse setting is programmed correctly. TONE/PULSE DIALING 1. Make sure the phone is OFF (not in TALK mode). 2. Use the CID/VOL left (-) or right (+) arrow button to scroll to 1TONE or 2PULSE, or use the touch tone pad on the handset to enter the desired setting. For example, to choose TONE dialing, press the number 1 key. 1TONE is the default setting. 3. Press flash/program to store selection. You will hear a confirmation tone.