1) Have you tried (using hyperterminal) to make your modem dial with exactly the same commands as your microcontroller is sending? Some comms programs send a (lengthy) init-string to the modem before actually sending the dial-string...

Or you can put it this way: Are you sure it's not the AT-command set in combination with this modem that creates the problem?

2) what signals does your modem expect from the computer (rts, dtr..) and what signals do you actually generate (apart from tx-data) from your microcontroller? I assume it is an external modem, so if it works on your PC with hyperterminal, you should verify the state of rts and dtr ..

rgds
Patrick