Haven't been able to make/receive calls or texts for a month

I've had no service on my phone for a month now and haven't been able to make or receive calls or texts. I've had my phone (iphone 4) for almost a year now, one day it was fine, the next it wasn't. It literally just happened over night. My sim card works fine in other phones so i know thats not the problem.
After an endless amount of phone calls to O2 and no solution to the problem, I've now been told that my phone isn't reading the sim card properly and my phone needs to be sent to Apple. I'd take it to a store but the nearest one is 45 miles away and I don't drive so it's not very easy to get to. Also, as i bought it from a different website and not from an apple store and don't have any proof of purchase or warranty, would they still be able to fix it for me?
I recently went to Spain and while I was there my phone worked perfectly and I could call and text as usual, but as soon as I got back to the UK it stopped working again which suggests to me that it's nothing to do with my phone, as it was able to read the sim card fine in another country. Would I achieve anything by getting it unlocked and changing to another network?
Has anybody encountered anything like this before or have any solutions to the problem? After a month of this i'm at my wits end!!

Thanks for the reply. I bought the phone on november the 1st 2011 and it has worked perfectly until the end of last month when it started saying 'no service', and no this didn't occur during an update or restore. I don't make many calls or send texts a lot so I don't know when exactly when it did happen but I know it was working on september the 28th and it wasn't on september the 30th, I didnt update, restore or anything. When I bought it, (cant remember exactly where i bought it but it was an online shop), it was sold as being on the O2 network.
I contacted the network and they said they could unlock it, so maybe i'll try it on the Orange network instead as I managed to use that without any problems in Spain.
Thank you for the answer to my other questions as well.

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