A phone operating under normal conditions isn't particularly useful for triangulating its signal.
Actually, TDMA networks (which GSM is) with extremely small time slices (which GSM definitely is), are so timing-sensitive that all stations (read: phones) are constantly adjusting their transmit timing to compensate for distance. If the phone in your hand can calculate round-trip time to do that, the tower it connects to can certainly do so to calculate distance. After all, we know how fast the signal moves.
Sure, it's not triangulation, which requires three points (it's all on the name), but it provides a radius along (not within) which you are located. Actually, an arc of either 120 or 60 degrees, depending on whether the tower uses 3 or 6 semi-directional elements. If your signal reaches a 2nd tower, that's all the information they need; you are located where the two arcs intersect. A third point (for triangulation) is only necessary when distance information is not available.
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