I received a further response from my service provider.
When we forward incoming call to you, we offer PCMU, PCMA, G729 and GSM codecs(in that order), when you answer the call you offer PCMU, g729, GSM and PCMA codecs. The session runs using the first codec you offer, PCMU. Try to change codecs priority in zoiper settings, make g729 first.
So, even though I have g729 as the first codec according to the service provider I am offering PCMU. Can u tell me how to fix this? Thanks.