Sounds like ours might be different problems.

Mine was that the red LED was no longer on at any time, indicating that the phone could no longer talk to or through the car. So, I reset the system be removing and replacing the fuses to bring it back on-line. I never even had to pair the phone after.

In my 2006, there are three fuses. #7 in the Glove Box, and numbers 73, 74 in the rear.

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2006 X5 Sport 4.4i