the service provider lock (sp lock) is used by the provider you made a contract with. He gives you a phone which cost not much (sometimes nothing). But the phones are not free, YOU pay the phone by using it with the provider you made the contract.
And the rates are higher than usual (if you pay the full price of the phone and made a normal contract).
Due to this fact the provider locked the phone, so that you can use ONLY the provider you made the contract with (with the higher rates).
Any other SIM cards from different providers are not accepted.
Note: there are different locks (provider, country ...).
But the locks can be opened by special programs.