The provider (Telstra in Australia) did a bunch of tests and stated everything checked out OK from their end so they concluded that the fault must be with my iPhone. Telstra suggested a factory reset. I decided (wisely) to further experiment before taking that step.
Since posting my original comment, though further experimenting I have discovered:
- It is irrelevant that the number I could not reach was in my "favourites";
- When "Dial Assist" setting was toggled OFF, I could still dial through to the number using the keypad, but could still NOT get through when pressing on number in favourites or in contacts list;
- When retyped number in contacts list without the country code or the leading "0", the number could be reached be any method of dialing - but I like to have my numbers entered with full country codes.
So, in conclusion, it is a weird quirk when dial assist setting is toggled off AND this particular number is entered into contacts with full country code.
The problem goes away when dial assist is toggled "ON",
OR when the number in question is entered in contacts without country code or leading "0" (regardless of dial assist setting)
Go figure!