Iphone 7 128 audio disabled

Hello,

My phone is iPhone 7 128 GB (not plus).

It was on iOS 10.2

Yesterday suddenly (without any recent drops or liquid near it) it started to freeze intermittently and when I tried to call it from another phone I cannot hear anything, (both ways).

I attempted all the easy fix steps, restart --> Soft Reset --> Reset Settings --> cleaning the mic and earpiece.

Then I used iTunes to upgrade it to iOS 11.3

The freezing is fixed but something is very wrong with the audio.

During a call cannot hear and mic is not working. The speaker sign is disabled.

I tried the voice recording app, the record button is also disabled

It plays videos normally, the ringer works, the click sounds work, etc.

I tried to connect a wired headphone, it is not detected by the phone (charging and connecting to PC is working)

I tried a bluetooth headset it works as well.

Other things I tried unsuccessfully.

Set up as new iphone

restore to clean original firmware

use a different iCloud account

I really cannot narrow this down to a software issue (since there was also the freezing issue that got fixed) or a hardware issue. Any advice , troubleshooting or fix steps.