If location reporting is enabled for an UE then in case of X2 handover, source eNodeB includes Location reporting information IE (optional) within the handover request message. Location reporting is a separate procedure in S1-AP interface. When an MME want s to track an UE at cell level, it ask to eNodeB for that particular UE. After configuring the location reporting, eNodeB informs to MME when the UE serving cell gets changed due to mobility or cell re-selection.
I think there could be two reasons to enable location reporting.
- Due to access control
- Cell level charging for a particular UE.