Make sure that the phones are "S" or "SD" models. It sounds to me like you have some "H" models. They still have the button and the light, but they do not have an internal mic. They will only function handsfree on intercom and the transmit quality will be terrible as it uses the handset mic to transmit in handsfree mode. An "H" phone is not a speakerphone and will not function handsfree on outside calls.

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