Hey bhatti7860,
I would follow these recommended troubleshooting steps for when you encounter issues activating your iPhone:
Perform the following steps:
- Restart the iPhone.
- Try another means of reaching the activation server and attempt to activate.
- Try connecting to a known-good Wi-Fi network if you're unable to activate using a cellular data connection.
- Try connecting to iTunes if you're unable to activate using Wi-Fi.
- Restore the iPhone.
If you receive an alert message when you attempt to activate your iPhone, try to place the iPhone in recovery mode and perform a restore. If you're still unable to complete the setup assistant due to an activation error, contact Apple for assistance.
Additional Information
If you are asked to enter a password to proceed with activating the iPhone, Activation Lock may be enabled as part of Find my iPhone.
via: iPhone: Troubleshooting activation issues
http://support.apple.com/kb/TS3424
Welcome to Apple Support Communities!
Have a good one,
Delgadoh