At the edge or centre of each cell or sector in a cellular network, there is a base station. Operators know where these base stations are, because they were installed at fixed known locations. The mobility management function of a cellular network constantly keeps track of mobiles that are switched on (they don't need to be in a call). In fact, mobiles are in regular contact with the nearest base station just to keep tabs on parameters such as signal strength to ensure that the best station is being accessed, and to periodically tell the network which of the reachable base stations seems best to ‘camp onto’ in readiness for making or receiving calls, or exchanging data. It is imperative that the network knows where a mobile is so that any inbound calls can be routed to the appropriate cell. The same applies for inbound data, such as a WAP Push or text message. Hence, if we know which base station a mobile is currently camped on, then we know its rough location with respect to its proximity to the serving cell site (base station). At the very least, we can have the network report ‘mobile X is currently attached to base station Y which is at our Maidenhead site’. Hence, mobile X is in Maidenhead. This is the basis of the Cell ID approach to Location-Based Services (LBS).
With the ability to determine the location of a mobile known, all kinds of applications and services become possible. The UMTS Forum suggested a classification of LBS into four service areas: