2003 Vogue with a Kaput Phone !!!

When I bought my RR last year, it came without the phone handset, but there was the facility to slot in a SIM card (this is the pre-bluetooth set-up). All worked fine, and I could make and receive hands-free calls, but then quite suddenly it stopped working properly.
You can re - insert the SIM card and it goes through the loading and reading procedure, right up to the point when I can dial numbers, but then it simply fails to connect, giving an engaged type tone before cutting off. The red light is on all the time (without the SIM card in, it is on and flashing all the time). To me it seems as if the unit is working ok but without an aerial, but I'm an electronic dinosaur. The expert from my local LR dealer scratched his head and said 'beats me, mate' (at least he didn't charge £80/hour for this dazzling diagnosis).
Any suggestions would be very welcome.

Have you tried a different sim or tried the sim in another phone.

I've tried both, the SIM works well in a mobile and another card gives the same negative result in the car slot, so I have to eliminate that, unfortunately.