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This happens even when I have full signal, the sound fades in and out between normal volume and inaudible at second intervals.
Not sure what to even try with this.
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That sounds strange. Does this occur everytime you place/receive a call? Have you tried to place some calls while using a headset to see if same thing happens?
No, I've not tried a headset, but sound doesn't fade in and out when listening to music etc through the phone speakers so I don't think it's a speaker problem. I thought it must be signal/carrier related, but the signal strength doesn't seem to make any difference.
In that case, I suggest that you try another SIM-card. Perhaps a SIM-card from another network provider to exclude problems related to your carrier's network Otherwise, you may want to perform a software repair via PC Companion:
http://support.sonymobile.com/global-en/tools/pc-companion/
In PC Companion you press start on Support Zone > Start on Update the phone/tablet software > Repair phone/tablet (the blue clickable link in the message) > Follow these steps without having your device connected to the PC.
Follow the instruction that appears in the program and do not connect your device until this guide tells you how to connect it.