AUTH is part of the SMTP procedure for server authentication and is independent to SIM authentication, where AT^SGAUTH=3 is included to provider.ini. Why use the Siemens proprietary command which isn't in the manual?
The core problem is still SEMAIL - any news on that? Have you tested with GM862? As it works with your GM863 there must be a difference.
Since I've a deadline to meat I've started to implement my own mail procedure. But this cannot be a desirable solution. First using EASY-things from Roundsolutions and once everything is working getting confronted with new hardware and one has to start all over again!