Unable to activate, an update is required to activate your iPhone

First, since you have an iPhone 7 see if this applies→iPhone 7 Repair Program for "No Service" Issues - Apple Support

Go to Settings/General/About and look at Modem Firmware. Is the entry blank? If it is you need to reinstall it by restoring the phone to factory settings, then restoring a backup. Back up the phone first, of course:

1. How to back up your iPhone, iPad, and iPod touch - Apple Support
2. Restore your iPhone, iPad, or iPod to factory settings - Apple Support - follow the instructions to restore using your computer, do not using Settings/General/Reset (which is not included in those instructions)
3. Restore your iPhone, iPad, or iPod touch from a backup - Apple Support

If the modem firmware DOES have a value you may have a hardware problem. The first step is what I just posted, but after that you need to contact Apple support using the Get Support link at the top of this page.

Hi there

im sorry to hear that your iPhone isn’t working.

you can try the following steps to see if it helps with your problem

1. if you have a SIM card in the iPhone try to ejected it and put it back in. In most cases that helps with the problem. If that doesn’t work try ejecting the SIM card then restarting your iPhone and insert it back in
2. if that doesn’t fix the problem try updating it with a pc or Mac. Follow these guide’s for updating your Iphone

For PC:

https://support.apple.com/guide/itunes/itns3235/windows

For Mac:

https://support.apple.com/en-us/HT204204

if that didnt help then try updating the iPhone with recovery mode :

https://support.apple.com/en-au/HT201263

make sure you hit update and not restore. You could restore with a backup if you have one available

hope this helps!