Hi 'classexa'; if you have a 2003 car, you'll have the original 'SIM in the Arm' phone unit known as the "Telefon EU".
I had exactly same issue with my 2005 A8; "Telephone not installed" message but the MOST Bus must have been 'up' as the rest of the MMI worked.
Swapped in a pre-owned one off eBay and it all worked again.
Suspect the condition you and I had was an internal error in the phone hardware that didn't affect propogation of the optical signal round the loop.
Are you sure the replacement is/was a working unit?
Julian
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Audi A8 3.0TDi MY2016 in Nautilus Silver.
Audi A8 3.0TDI MY2005 in Midnight Blue. Gone since 2018, after 10 years!
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