Has anyone seen this message on their iPhone 7? It's the oddest thing. (There is a problem with your iPhone. This iPhone cannot be activated for service).
Yep, agree with the previous poster, sounds like a problem of that kind. Try checking the IMEI with your carrier or online websites to see that phone status.
I've never seen that before with any of my phones, iPhone or otherwise. Like others have said, it sounds like the iPhone was blacklisted. If you bought it used on eBay or another website, I would try returning it. Contact the seller ASAP.
The phone is either stolen, or the previous owner still owes money on their cell phone bill. Those are the only reasons that it would give that specific error.