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I have the same problem. I have an IPhone 4 and I also get the message that says Internet not available in my country (South Africa). But, the weirdest part is that it did work for a while a few months ago. When I got the car it didn't work and BMW couldn't help me with a solution. Then suddenly, for some unknown reason it started working for a while and now it doesn't again.
I suspect that it was after I updated my phone to IOS5 that it stopped working - but I can't say for sure.
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