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Hybrid Connect won't Pair with new BT Home Hub 2

We took delivery of a new BT Home Hub 2 the day before yesterday. The Home Hub has connected and is working fine but the Hybrid Connect will not pair with the hub. It is positoned correctly, on a window sill, away from other electronics but close to the hub. It is currently connected via the yellow Ethernet lead. I've repeatedly tried all the suggested fixes but to no avail, that includes the Factory reset. It is still 'flashing blue' with flashing red 4G signal bars which means the device cannot connect to the network. I've tried plugging it in in another site away from the hub but then receive the 'flashing green' light, indicating it's not paired. All the help videos are not very helpful. Does it need returning?

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