IPhone :: 3GS Having Very Weak Signals And Sometimes Not Single ?

I have 2 year old 3GS, and for the past few days I've had a constant problem of the phone having a signal, then losing it and searching, then saying No Service, then searching, finding the signal and then repeating the whole thing over and over. Sometimes when it says no service, I manually have to go into settings, turn on airplane mode, and turn it off again to force it to search again. What typically happens is I will send a text, get a reply, go to reply and my signal will have gone. My 3G will come and go also however this doesn't happen with WIFI. The biggest problem I am having however is that yesterday my phone locked up, went to the apple logo and stayed there for over 10 minutes, I forced a restart but it said "Activation needed" when I swiped this it said "Connect to iTunes", iTunes says it can't read the data on the phone. I then put the phone into recovery mode and did a restore to 5.1.1, obviously losing all the photos I'd taken since my last back up and wiping my entire phone. As I felt the phone was being dodgy I didn't do a restore from my backup and just put a few contacts in. Today during a constant back and forth texting session my phone was repeatedly losing connection and coming back. It has just locked, gone to the apple logo and it says "Activation needed".

Info:
iPhone 3GS, iOS 5.1.1