Iphone 4 put in sim card no service?

I got my brothers old iphone and I had a telstra pre paid sim card so I took it and got it cut to the size of a macro sim then when I put it in my iphone it says no service. My brother was on telstra too and it is an unlocked phone. What's the problem? What do I need to do?

Added (1). And when i put the sim in it says sim failure

Buy a proper sim card!

"and when i put the sim in it says sim failure"

That is your answer, surely you understand what SIM Failure means.