To connect by telnet correctly (port 23) you need to have the default gateway correctly set in you SCO 5 server. Version before 5.0.7 may not correctly use the default gateway stored in your "netconf" settings. One simple fix is to create a "start-up" script which should ensure that the default gateway is always set.

Using a text editor (like vi) create /etc/rc2.d/S99route with

#
# S99route : To specify default route to the Internet
#
/etc/route add default <ip address of your network's router / firewall>