Can you please make sure you're setting up everything according to this article
from our Documentation? Also is it possible to provide me with a copy of your SystemConfig.config file so I can inspect the settings reflected there. I have just set up the SMTP functionality on a test project by providing valid username email and host, and it seems to be working fine (build version 4.1.1395) Please let me know the exact steps you're taking to reproduce this issue, if problems persist. I'll be glad to help you further.
the Telerik team
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