When I try to set up my phone it says this device is not eligible for free iCloud account

When I try to set up my phone it says this device is not eligible for free iCloud account

Import them to your computer as discussed here: http://support.apple.com/kb/HT4083, then either delete them from your phone or exclude the camera roll from your iCloud backup by going to Settings>iCloud>Storage & Backup>Manage Storage, tap the name of your phone under Backups, then turn Camera Roll to Off under Backup Options.
Also check Settings>General>Usage to see how much availble space is on your phone.  If you have to delete apps in order to take photos, you may be out of space on your phone.  If so, you need to delete something in order to create more space.

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