Windows Live ID or Microsoft Account is the ID composed from an email address and a password, which you can use to sign in to services Hotmail (or Outlook.com), OneDrive, Xbox, Find My Phone, Zune and MSN.

If you do not have a Microsoft Account, you can still use your Lumia phone but you will be missing out on some great features such as automatic wireless sync of your content such as contacts, calendar and photos. Also, you cannot download apps, music, or access Windows Phone Store without a Microsoft Account.

You can create one at www.live.com.