Contract iphone help! iphone brought on contract, want to use on payg?

my friend had an iphone on contract (i think its 3gs, it's black and has 16gb written on the back) but lost her phone so got a new one delivered to her. she then found her old iphone (the one she lost) and gave it to me, but it's locked on O2 with her contract sim (which is inactive) and was wondering, if i got a new O2 sim - pay as you go - would it work on the iphone?