You can activate any iOS 7 device using the latest version of iTunes, or you can activate it using Wi-Fi or handset data. However, you will be charged for 2 international TXTs to activate iMessage and FaceTime.
Set up steps
After your new iPhone powers on, you'll see a welcome screen, Slide your finger across the bottom where it says slide to set up.
Now choose your language.
Select the country or region you are in.
Now choose your WiFi network and enter the password for it if there is one. If you don't have access to WiFi or no networks are found, you can choose Use mobile instead or wait until you're within range of an accessible WiFi network.
Now on the Location Services screen, choose whether you'd like to have location services on by default. Certain apps such as Maps need location services to operate properly.
On the next screen, tap on Set up as New iPhone.
Now choose to either sign in with an existing Apple ID or create a new, free one. If you don't want to do either right now, you can tap on Skip This Step.
If you didn't choose to skip signing into an Apple ID, do so on the next screen. If you use two separate IDs for iCloud and iTunes, you can choose that option as well under the login by tapping on Use different Apple IDs for iCloud and iTunes.
Agree to Apple's Terms and Conditions on the next screen. The following screen will ask you to confirm that you agree one more time.
On the next screen, choose whether or not you want to use iCloud to access data on other iOS devices and to store your photos, contacts, and calendars.
Now choose whether or not you'd like to enable Find My iPhone.
The next screen lets you choose what phone numbers and emails associated with your Apple ID that you'd like to use on your new iPhone on conjunction with iMessage. Simply tap on them to enable or disable them. You can always change these choices later in Settings.
Next you can Create a Passcode for your iPhone if you'd like. If not, just tap on Don't Add Passcode above the keypad.
Now choose whether or not you'd like to activate Siri.
Lastly, choose whether or not you'd like your iPhone to send diagnostic information to Apple. Read the description before making your choice. On the Welcome to iPhone screen, just tap on Get Started and your iPhone Home screen will be displayed for the first time.
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