What is wrong with the iPhone 5?

A few days ago I bought an iPhone 5 from a friend, he said the phone was still working fine, but he was selling it for really cheap £50 so to me it sounded like there's something wrong with it, but I bought it anyways you can't find an iPhones for that cheap unless its a contract phone. So after I bought it I took it home got my brother to set everything up for me but couldn't coz we had to activate it and its on O2 and we didn't have an O2 sim card, so I went and bought one, when my brother inserted the sim card it was ready to be activated he had to set up somethings the phone requires you to do. When the phone was activating it had signal bars but when it was activated and went into the home screen the phone signal bar went, no signal bars at all and it doesn't come back, so I was searching on google for some info. Most informations where just how to fix problem I tried all suggestions none worked then I thought the phone was probably blocked I searched for imei blacklist check everyone I checked said that the imei is unblocked. Now I'm thinking the phone is faulty coz I get no signal bars can't make phone calls or text unless I use Wi-Fi. Can anyone help me with this problem and tell me what's wrong with the phone and I know I'm stupid for even buying the phone but since it was that cheap I thought might as well just buy it, anyways thanks in advance.

You sure that was "a friend"?