Siemens A580IP - unable to transfer calls

I cannot transfer calls between extensions on the A580IP.

When I receive a call I press the call transfer sequence ## at which point I get a dial tone and the caller hears music on hold. Good.

Then when I dial the other extension I immediately get a busy tone on the A58H and the caller receives a "person at extension xxx is unavailable". The error message on the handset is Voip Status 701.

The A580IP can handle 2 IP lines and 1 landline at the same time so why am I being blocked?

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