My friend recently bought a brand new phone from Vodafone but they have no 3G signal and Vodafone are refusing to cancel contract etc.

They currently purchased an I phone 5 and Samsung not sure which model, both currently have micro sims.

Is it possible they can remove the micro sims and replace with pay as you go micro sims and go to a phone un-locking service which you can find in some high streets ?

Yes it is. Always best to test any network you plan to join on pay as you go first before committing to an 18 month or 2 year contract.

Are you suggesting they are simply going to stop paying the contract