Released from iphone contract

I purchased an iphone in November and it was activated onto an iphone tariff.
After months of billing/payment problems o2 have released me from my contract 13 months early so that i'm no longer in contract with them.
I'm puzzled as to what to do with the handset now, i'd rather use it legit so that I can receive apple updates and the like but obviously I want to be able to use it but if I put another sim card in it will just reject it.
Now when I put another o2 sim card in it's searching for activation.
I tried emailing o2, no reply suprise
I've been released from the iPhone contract by o2 because of their mistakes. I've paid £269 for a handset I can't use now, and that's o2's fault so they should fix it. No doubt they didn't think they'd have to deal with this for another 13 month or so. I bought an iPhone and activated it onto an iphone tariff and have used it for 5 month, I've now been legitimately released by o2 themselves.
I might actually be the first legitimate iphone user without a contract which is why no-one at o2 can tell me what my rights are with the handset, now.
any ideas?

I'm fine about using o2, but i've been through **** with them over my contract - why should I be tied in for another 18 months?
These are failings of o2 and i'm now left with a £269 phone I can't use or the option of taking an further 18 months with the company that got it wrong in the first place! If i take another iphone contract with them i'll have been on the iphone tariff for 23 months, that's ridiculous. I'm essentially out of contract with o2, i've finished the contract - so the phone should be free for me to do what I want with it. I've finished all my obligations, and i'm in the exact position other people are going to be in 13 months from now when there contracts end!
I've paid £269 for what is essentially a very pretty paper weight.

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