No, it is not mandatory.
Apple Watch Series 3 (GPS + Cellular) can be paired, set up and used for other features whilst skipping the steps to activate cellular. It will then function like a GPS-only model.
The built-in cellular feature can be enabled later, if and when desired, subject to having a compatible service plan on your iPhone that specifically includes support for the Apple Watch, including the carrier activating the watch on the plan.
- Apple Watch - Carriers - Apple
- Set up and use cellular on Apple Watch Series 3 (GPS + Cellular) - Apple Support
In the meantime, it can be used in conjunction an iPhone 6 or newer model (running the latest version of iOS) with a service plan from any carrier.
The functions that are available on your Apple Watch when it is away from your iPhone depend on various factors including:
- Your Apple Watch model - Series 3 (GPS) vs Series 3 (GPS + Cellular):
- The features of your carrier service plan:
- The type of connectivity that is available to your Apple Watch at the time:
Features and requirements that apply under various circumstances are detailed here, including within the footnotes: