Just few days back I noticed I could not make outgoing calls on my iPhone 4 running iOS 7.1.2 and on Airtel netowrk in India. Although I was getting incoming calls and SMSes just fine and my network bars were full. Surprisingly data over 3G worked fine as well.
I tried all the iPhone ‘fixes’ available under the sun, like restart phone, airplane mode on/off, Reset Network settings, Complete Reset of content and settings. (This is equivalent to setting up a new iPhone and restoring your settings from iCloud or iTunes, took almost 3 to 4 hours).
I still continued to get a tone as soon as I dial a number with a message call ended within few seconds of calling.
Some snooping around the interwebs took me to few apple forums where the same was discussed and some kind user had suggested to dial a number and that fixes it.
Dial *#31# Make sure you have full network coverage before attempting the same. If it goes well you should see the screen as shown below. And voila, I could make calls again.