Log into LD 32 and key in FSUM ALL to list out all the firmware. I also think it might be a firmware version problem.
Here are some reports I have found that might help.
Release 3 M3905 Taurus sets unable to transfer when connected to a release 24.25 Meridian.
Meridian running release 24.25 software. Customer ordered new M3905 Taurus sets. Release 3 ( firmware version 8.3 ) Taurus sets delivered. When fitted it was found that the transfer facility would not work on these sets. Release 3 (firmware 8.3 ) Taurus sets can't be used on sites running 24.25 software. Release 1 Taurus sets will work, or an upgrade to release 25 will be required.
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M3905 telephone loses transfer facility after firmware upgrade
Following an upgrade on some M3905 telephones the transfer soft key ceased to function.
When the tn was printed the key was on key 17 as normal but would not work. By outing the key and then reproviding it seems to kick it back into life.
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The following versions of up-issued firmware for the M3900 series of digital phones are now Generally Available:
M3903 version 9.0
M3904 version 9.3
M3905 version 9.3 version 9.4 now being shipped on Rls 7.5 sites
See Nortel Technical Bulletin 2009009684, Rev 2 for full details
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Important Note for upgrades to CS1000 release 6
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It is recommended for all CS1000 customers upgrading to release 6.0 to have their M3900 sets upgraded to the latest firmware version prior to the core upgrade. Failing to do so will cause problems with M3900 sets during Transfer call scenarios.
A fix for CR (Q01805423-01: 390x during a transfer call have no 'Conference' softkey) was introduced, this fix
contains changes in both core and Taurus firmware, if CS1000 system is upgraded to Release 6.0 without upgrading M3900 sets then during the transfer scenario, after the second leg of the call is answered the connect key will not appear.
Firebird Scrambler
Nortel Meridian 1 / Succession and BCM / Norstar Programmer in the UK
Advance knowledge on BCM support