My refurbished iphone 5 won't activate

Hi. I have a refurbished iphone 5 from UK and I'm living in the middle east. Have just bought a new SIM for it but I receive an error message when trying to activate this new phone:
"The SIM card that you currently have installed in this iPhone is from a carrier that is not supported under the activation policy that is currently assigned by the activation server. This is not a hardware issue with the iPhone. Please insert another SIM card from a supported carrier or request that this iPhone be unlocked by your carrier. Please contact Apple for more information."
1. As far as I'm aware this phone is carrier-free at the moment - it hasn't been activated with any other carrier since being refurbished.
2. I don't have another SIM to fit into my iphone 5.
3. How do I fix this? Is this an issue my new carrier can fix, or does the phone need to be returned to the UK where I got it to be unlocked for use outside the UK perhaps?
Thanks for any help!

3. The UK carriers require you to be an active customer on their Network ,in the UK .
Customer can be PAYG or Contract BUT iPhone must be in UK for them to "see it "

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I did a restore on my iphone 4 earlier. This is the first time I have ever done a restore-I have only had this phone for about 2 weeks. However, I was having battery problems so I chose to restore.
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