So worried are the mobile-phone firms at a possible backlash that they have drawn up an industry code of practice designed to see off the threat of legislation regulating the issue.
It is also something which concerns the European Commission. This week the UK will adopt the EC's Privacy and Electronic Communications Directive which decrees that a mobile-phone user can be tracked only if he or she explicitly gives consent.
Even those in favor of tracking acknowledge the issue needs to be handled sensitively.
"With any new technology, much depends on how you sell it," said Emma Hardcastle, managing director of mapminder.co.uk, which recently launched an online service that allows people to track an individual's mobile phone.
"In the next couple of years there will be huge change in this area. We need to make sure it doesn't invade anyone's privacy," she said.
Since Hardcastle's company launched the tracking service a month ago it has received hundreds of registrations.
"Most of it is coming from companies, but not all. We had one person who wanted to be able to track his mother who has Alzheimers," Hardcastle said.
A similar service -- mapAmobile -- offered by the Carphone Warehouse retail chain has also reported brisk interest.
"We were targeting the service at children," said a spokeswoman for the retailer. "It's a good way for parents to keep track of their kids rather than phoning them constantly to find out where they are."
"But we've also had some interest from taxi companies," she said.
The mobile-phone networks believe the location-based tracking services -- which will allow firms to target specific customers when they enter designated locations -- will become a major marketing weapon in the future.
Edward Brewster, spokesman for the mobile-phone company 3, which this month launches a tracking service incorporating satellite positioning technology, said: "We already offer some location-based services, but now you will be able to be guided to everything from restaurants to the nearest cash machine via your mobile phone."
"This is going to offer the customer a whole new experience," he said.
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