unable to activate update required

Hey there, Lindbalde,

Thanks for stopping by the Apple Support Communities. From your post, I understand you're receiving an error when trying to activate your iPhone 7 that it requires an update to activate. I'm happy to help!

Based on what you've described, I'd recommend the following steps, which are described in the Apple Support article If you see a Cellular Update Failed or Apple Pay Not Available alert after iOS update or restart - Apple Support:

"Before proceeding, make sure that you have a backup of your iPhone or iPad. Then follow these steps to reinstall iOS:

1. Connect your device to a Mac with macOS Mojave 10.14.4 or later, or a Windows computer with iTunes 12.9.4 or later.
2. If you see a "Trust this Computer" alert, unlock your device and tap Trust.
3. Open iTunes and select your device.
4. Click Summary, then follow these steps:

• • On a Mac: Command-click Check for Update.
  • On a Windows computer: Control-click Check for Update.

iTunes will download and reinstall the current version of iOS on your device. Don't disconnect your device from your computer until the download completes.

If you continue to see either of the alerts above, take your iPhone or iPad to an Apple Authorized Service Provider or make a Genius Bar reservation at an Apple Store. You can also contact Apple Support."

Since you're using an iPhone 7, I'd also recommend checking out the information in iPhone 7 Repair Program for "No Service" Issues - Apple Support to see if your iPhone is one of the affected devices. If so, or you still need help after going through the above steps, please get in touch with Apple Support directly: Contact Apple Support.

Have a wonderful day.