Unable to activate Iphone7 after restore

I was having storage issues with iphone7(model a1778) since the "other storage" had swollen to 14GB! Based on the Apple support webpage, took back up and did reset and restored from the back up. It upgraded to iOS 13.6. Asked to connect to WiFi and then went on to activating the SIM and gave below message:

"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 support carrier or request that this iPhone be unlocked by your carrier. Please contact Apple for more information."

Called Apple Support who asked me to call the wireless carrier.

Called the carrier, they said iphone7 was not locked and the SIM was good. Tried using the SIM card in another old smartphone and it work.

My iphone7 (was already unlocked) was working fine before the restore other than nagging storage issue. What should be my next steps to get it working.