My refurbished iphone 5 won't activate

Hi. I have a refurbished iphone 5 from UK and I'm living in the middle east. Have just bought a new SIM for it but I receive an error message when trying to activate this new phone:

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

1. As far as I'm aware this phone is carrier-free at the moment - it hasn't been activated with any other carrier since being refurbished.

2. I don't have another SIM to fit into my iphone 5.

3. How do I fix this? Is this an issue my new carrier can fix, or does the phone need to be returned to the UK where I got it to be unlocked for use outside the UK perhaps?

Thanks for any help!