Cannot make or receive phone calls

My iphone 3 works great on internet & texting.  But phone does not make or receive calls.  If I get a voicemail All I hear is "air"; same if I make a phone call.

Hi maxnh1,
make sure that you have no net-issues by testing your SIM-Card in another device. If it works fine, most probably your iPhone is the troublemaker, if the cars is not working in the other cell-phone ... well, you guess what .
Regards, Peter

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