iOS 10.3.1 with Apple SIM, works fine with AOW (AlwaysOnline Wireless).
Connecting to iTunes via USB or Wi-Fi I am always told that there is a Carrier Settings Update available. Answering "yes" I get a success message. On the iPad when I navigate to Settings:General:About I am also offered an update but in this case there is no success/failure indication. Carrier version is 28.0 which matches the version I get when using other carrier SIMs (when I am _not_ prompted to update carrier settings).
Connecting to iTunes via USB or Wi-Fi I am always told that there is a Carrier Settings Update available. Answering "yes" I get a success message. On the iPad when I navigate to Settings:General:About I am also offered an update but in this case there is no success/failure indication. Carrier version is 28.0 which matches the version I get when using other carrier SIMs (when I am _not_ prompted to update carrier settings).