I'm having a somewhat similar problem after doing the iOS 9.3 upgrade on my iPhone 4s - after entering Apple ID & password I get "Activation error -unable to complete activation" message. So my iPhone is totally useless currently - never gets past activation. I've spent 5 hours with Apple technical support and time with local Apple store technician who all say they've never seen this specific activation problem before, although one support tech did say are getting many calls about 9.3 upgrade problems with the 4s. The store technician diagnosed that for some reason (if I understood her correctly) instead of just going to the Apple activation server (for AT&T, my carrier) it also going to a second activation server, which it is not supposed to do and then does not pass or is hanging on it. They are in agreement that it is software problem/bug in the 9.3 upgrade, not a hardware problem with my iPhone. As part of trying to figure out what was going on, I had to do many power down resets, remove &reinstall the SIM card, Apple store tech even tried a new SIM card, completely erase the iPhone and go through the recovery steps othershave listed previously (multiple times) – none of which has worked. So it looks like the 9.3 upgrade changed something in the iPhone that even a "reset to factory original mode" will not undo.
Here's the fix options as offered by Apple as of this afternoon:
(1) Apple store technician submitted a special activation request work order to do the correct activation process, but I have to wait 24 hours for it to process completely - if it works, they say my phone should be OK..
<< I selected thisthis now. So no working iPhone in the meantime.
(2) Wait for Apple to issue a new iOS software release with a fix for the problem
<<< did not select this, as have no way of knowing if or when a release would come out. Could be today or 6 weeks from now and I’d be without a working phone until then.
(3) Buy a new iPhone
>>> This is the most objectionable option and not selected. It is not my fault that the iOS upgrade killed my phone, all I did was say yes to the upgrade. So I'm to spend somewhere between $400 to $800 dollars on a new phone for Apple's software problem??? Uh, no. My view is that if Apple cannot fix the upgrade software issue quickly, I should at least be swapped for an equivalent working iPhone at no charge.
And needless to say, I'm not about to upgrade my iPad2 until Apple fixes the problem....