No Audio Over Internet for calls

[leejor]

but 3g no audio can be heard on the Iphone handset, and the call quality the person the other hears is very broken and poor.

As it works over WiFi, it sounds like something you should be taking this up with your provider. It sounds like it is their network, not passing through packets, that is causing problems. Unfortunately, they may just come back and say "sorry, we don't support that"