Sim Failure / Can't activate sim

Hi wonder if anyone can help!
I have a GiffGaff (o2 Network) sim card and wanted to change to a 3 Sim card, my original iPhone was bought unlocked, I sadly messed this up by putting it in the washing machine so I then got a replacement phone at the cost of £119 (Fair enough) That phone then went on to develop a fault about 6 months later to mean it got NO signal at all meaning another £119 replacement, I have popped into the apple store and because it's an iPhone 4 they do not want to go near it, it's either a warrenty replacement or a new iPhone (being that i'm moving away from Apple due to many many reasons there is no way i'm buying a new iPhone or another OOW replacement)
Was wondering if anyone can help this bazar issue, it recognises my Giffgaff (o2) sim card fine (Still does) but fails to activate or recognise (Sim Failure) the 3 Sim, I have tried 4 different sim cards and none have worked! My iPhone reports this is not a software issue, 3 are saying it's an apple fault with the phone and Apple want nothing to do with the problem until they have another £119 out of me. The thing that baffles me is why does my GiffGaff sim still work?! Just not the 3 Sim card?!
Any help would be Amazing!
My phone is running IOS 7 and is an hopefully unlocked iPhone 4 baught directly from apple!

I was trying to activate it without a SIM (I didn't want to have my SIM from my 3GS cut to a micro SIM until I was sure the phone would work). I didn't realize that I couldn't activate without a SIM. I just used one from my carrier in Cambodia and it worked perfectly. Thanks!

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