Error Message: Transaction failed. The server response was: 5.7.1 : Relay access denied Email failed!

On SharePoint 2010, our outgoing smtp server is our service provider's SMTP server and we are able to send email to the service provider hosted domain means our internal domain but we are getting below error message when sending email outside domain!

Error Message: Transaction failed. The server response was: 5.7.1 : Relay access denied
Email failed!
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Justin SmithSr. System EngineerCommented:
That needs to be configured on the SMTP server, not SharePoint.  They must allow you to relay to the internet, anonymously.  In all honesty they may tell you no.
ShabAuthor Commented:
On IIS 6 Manager SMTP virtual server (which I believe is for receiving email)  have configured relay as local server. I have even tried to make it all listings but no luck!

Sharepoint outgoing server is unauthenticated one which works well for registered domain (hosted exchange with the same smtp provider)
Justin SmithSr. System EngineerCommented:
Let's back up.

What do you have in Central Admin - Outgoing Email Settings?  The provider's SMTP address, or your local server?
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ShabAuthor Commented:
Providers SMTP address
ShabAuthor Commented:
This is purely issue with our Service Providers as they don't allow sending email to outside the organization unless it's authenticated!

@ACH1LLES - Thanks for your time

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ShabAuthor Commented:
I've requested that this question be closed as follows:

Accepted answer: 0 points for petertwliu's comment #a40201634

for the following reason:

It's completely issue with our service provider not a configuration issue!
Justin SmithSr. System EngineerCommented:
Don't close this ticket.  Award my first response as the answer because it is.  This is controlled on the SMTP server.
ShabAuthor Commented:
I need to reopen this case as I have noticed some weird things!

When I type any SMTP server like address on Sharepoint outgoing SMTP server, the effect is same!
I can STILL send email to our internal staff but not outside??

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