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If you've had an iPhone for a while, you might have seen a popup message that tells you there is a Carrier Settings Update and asking if you'd like to update them now. If you're the type that doesn't click things until you know what they are (good for you!), then you are in the right place.

The short answer: Yes, do the carrier update.

So What is a Carrier Settings Update?

Apple's help site explains it this way:

Carrier settings updates are small files that can include updates from Apple and your carrier to carrier-related settings, such as network, calling, cellular data, messaging, personal hotspot, and voicemail settings. You may receive notifications from time to time to install new carrier-settings updates.

What this means is that your iPhone needs to know all of the settings and other information for the carrier you are using. For example, if Verizon decides to make some changes to their network to adjust the frequency of their signal, or is migrating to a new system, they need a way to tell your iPhone about this, so they push out an update to everybody as a small settings file instead of requiring a full iOS update.

After you click the Update button, the carrier settings are immediately updated, and you're good to go. You won't even have to restart your phone.

It's really important to do these carrier updates, because unlike updating to the latest iOS, carrier updates solve actual problems. For example, AT&T had some voicemail issues that were resolved by a carrier update. There also was a really big problem with the iPhone connecting to cell towers that was resolved through carrier updates.

Checking for Updates Manually

You can manually check to see if there are any carrier updates by going into Settings > General > About. Your phone will automatically check with your carrier to see if there is an update. If you don't see a popup, you're good to go.