It looks to me like the server is sending a VT100 query device code command to the 'terminal' (your telnet client, when you run your script). It is probably then waiting to receive your device code. Since you don't send your device code, it doesn't continue to send the menu and prompt.
You probably have a timeout because your script is waiting for the server to send data and the server is waiting for your script to send data. It's good that at least one of them timeout.
You should read up on VT100 terminal. The first source I found with the 'query device code' sequence was http://www.termsys.demon.co.uk/vtansi.htm, but there are many.