ppp does not send echo-requests

Binary package hint: ppp

I am using pppd (version 2.4.4) on Edgy and I noticed that pppd is not sending lcp echo requests. In the options file of pppd I have set "lcp-echo-interval" as 5 and "lcp-echo-failure" as 3.
In the output of pppd below, there is just 1 echo-request being sent by pppd for which it receives a response. After that there are no more lcp echo requests sent by pppd.
Since the asyncmap value returned by the modem is 0, I also tried this using NOMAGIC parameter in the options file, but that does not help.

Output log of pppd:

ATD*99***1#
CONNECT
Connected OK
Serial connection established.
using channel 2
Using interface ppp0
Connect: ppp0 <--> /dev/pts/3
sent [LCP ConfReq id=0x1 <magic 0x329a68e3> <pcomp> <accomp>]
rcvd [LCP ConfReq id=0x1 <asyncmap 0xa0000> <auth pap>]
sent [LCP ConfAck id=0x1 <asyncmap 0xa0000> <auth pap>]
rcvd [LCP ConfAck id=0x1 <magic 0x329a68e3> <pcomp> <accomp>]
sent [LCP EchoReq id=0x0 magic=0x329a68e3] <-- 1st echo-request
sent [PAP AuthReq id=0x1 user="dummy" password=<hidden>]
rcvd [LCP EchoRep id=0x0 magic=0x0 00 00] <-- response to first echo-request
rcvd [PAP AuthAck id=0x1 ""]
PAP authentication succeeded
sent [CCP ConfReq id=0x1 <deflate 15> <deflate(old#) 15> <bsd v1 15>]
sent [IPCP ConfReq id=0x1 <compress VJ 0f 01> <addr 0.0.0.0> <ms-dns1 0.0.0.0> <ms-dns3 0.0.0.0>]
rcvd [IPCP ConfReq id=0x2 <addr 85.102.119.136>]
sent [IPCP ConfAck id=0x2 <addr 85.102.119.136>]
rcvd [LCP ProtRej id=0x1 80 fd 01 01 00 0f 1a 04 78 00 18 04 78 00 15 03 2f]
Protocol-Reject for 'Compression Control Protocol' (0x80fd) received
rcvd [IPCP ConfRej id=0x1 <compress VJ 0f 01>]
sent [IPCP ConfReq id=0x2 <addr 0.0.0.0> <ms-dns1 0.0.0.0> <ms-dns3 0.0.0.0>]
rcvd [IPCP ConfNak id=0x2 <addr 10.3.0.5> <ms-dns1 192.168.101.1>]
sent [IPCP ConfReq id=0x3 <addr 10.3.0.5> <ms-dns1 192.168.101.1> <ms-dns3 0.0.0.0>]
rcvd [IPCP ConfAck id=0x3 <addr 10.3.0.5> <ms-dns1 192.168.101.1> <ms-dns3 0.0.0.0>]
local IP address 10.3.0.5
remote IP address 85.102.119.136
primary DNS address 192.168.101.1
Script /etc/ppp/ip-up started (pid 4705)
Script /etc/ppp/ip-up finished (pid 4705), status = 0x0
No response to 3 echo-requests <-- ppp connection gets terminated due to this
Serial link appears to be disconnected.
Connect time 0.3 minutes.
Sent 1547 bytes, received 16545 bytes.
Script /etc/ppp/ip-down started (pid 4735)
sent [LCP TermReq id=0x2 "Peer not responding"]
Hangup (SIGHUP)
Script pppd (charshunt) finished (pid 4699), status = 0x0
Modem hangup
Connection terminated.
Script /etc/ppp/ip-down finished (pid 4735), status = 0x0