Your phone receives radio frequencies from Global Positioning System Satellites to locate where you are on a map, provided to your phone by Cellular Service. When trying to find your location, your phone looks for a radio frequency from 3 satellites to use trilateration to find your location. In essence, it 'draws' 3 circles that intersect at 2 locations, one in the sky, and one on the ground. Your location is the intersection on the ground.

There are 27 GPS Satellites orbiting earth, with 24 in use at any given time, leaving 3 as backups.
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