Location Based Services (LBS) are information and entertainment services accessible with mobile devices through the mobile network and utilizing the ability to make use of the geographical position of the mobile device.LBS services include services to identify a location of a person or object, such as discovering the nearest banking cash machine or the whereabouts of a friend or employee. LBS services include parcel tracking and vehicle tracking services. They include personalized weather services and even location-based games.

Some examples of location-based services are:

• Requesting the nearest business or service, such as an ATM or restaurant
• Turn by turn navigation to any address
• Locating people on a map displayed on the mobile phone
• Receiving alerts, such as notification of a sale on gas or warning of a traffic jam

For the carrier, location-based services provide added value by enabling services such as:

• Resource tracking with dynamic distribution. Taxis, service people, rental equipment, doctors, fleet scheduling.
• Resource tracking. Objects without privacy controls, using passive sensors or RF tags, such as packages and train boxcars.
• Finding someone or something. Person by skill (doctor), business directory, navigation, weather, traffic, room schedules, stolen phone, emergency calls.
• Proximity-based notification (push or pull). Targeted advertising, buddy list, common profile matching (dating), automatic airport check-in.
• Proximity-based actuation (push or pull). Payment based upon proximity (EZ pass, toll watch).

Check out the LBS Zone here. This is one of the most comprehensive sites on Location Based Services.