I have a circuit where I am using a SIM900 GSM/GPRS module. As per the datasheet it needs 3.4 V - 4.8 V and upto 2 A of current. I am using LM2576. The input to the regulator is 12 V & 4.2 A and output (which is going to SIM900) is 4.175 V. I have connected leds for NETLIGHT and STATUS LIGHT. I have connected a switch between PWRKEY and GND to start the SIM900. Following is the schematic of regulator:

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SIM900:

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The problem I am facing is as soon as I press the switch S1 to turn on the SIM900, its netlight led starts blinking and status light led is always off. There is no high voltage on status pin. I know that the net light blinks for network registration but this kind of blinking is not the expected behaviour of net light. It blinks twice a second and when I release the switch, it stops blinking. Status pin is always low. I checked the voltage. voltage seems to be stable on VBAT pins. Initially I am giving it 4.175v and when I press the switch it becomes 4.15-4.17v. I tried reflashing the firmware but during the process, it shows following error

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In above pic it says that Target responding.. Does this means the SIM900A is in working condition because I was thinking that SIM900A is faulty.
What else could be the reason for this kind of behaviour. How can I debug it.
Please help. Thanks