Carrier settings updates are small files that are installed on iOS devices. The carrier settings include updates to Access Point Names (APNs), MMS settings, features like tethering and default apps. Having the most up to date carrier settings is recommended for the proper functionality of the device.
Apple Watch Series 3 users must be on Carrier Bundle 29.1 or higher (check on your iPhone via Settings > General > About > Carrier). For more info on how to check carrier and / or update your Carrier version, refer to Updating Your Carrier Settings.
From a Home screen, navigate: Settings > General > About.
If a carrier settings update is available, you're presented with an option to update.
To view the current carrier info, refer to View Carrier.