Lost iphone

Hey, my iphone was stolen a month ago (i did not used to lock it by the passcode), i enabled the lost mode then and just saw that its activated. But what i do not understand is, after the lost mode is activated for a while, i get the pop up window that the location is turned off so iphone cannot be located but it can be put into lost mode. when i turn on lost mode again and the iphone comes online, i recieve the mail that lost mode is enabled, but after a while the same thing repeats. Is the activation being cancelled for some reason? What should i do next?

Also if i erase my iphone will it lose the lost mode/lock, and will they be able to recover the device with some other id?

Thanks a lot.