Servicing becomes a personal decision, not a hard-fasts rule, as it relates to when.. However, it is always a necessity at some point in time..
Rolex recommends "...about every 5 years, depending on wearing habits and use."
So, if you are an outdoorsman with an active lifestyle in the water or arid deserts, 5 years would be a likely time-frame.. If not, longer if just fine with 9 to 10 years being a comfortable medium... Many have gone much longer..
When it is serviced properly, it is taken completely apart, every part cleaned and checked for tolerance, out-of-tolerance parts replaced, and re-assembled and properly oiled and regulated..
Not everybody does this and many shops (who charge much less) simply clean the major components then oil it and adjust... a far cry from a proper service..