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In this work, a location-based services (LBS) algorithm for teletraffic management is proposed as a new approach to solve the traffic problem within the cellular mobile system. The model is based on four base stations covering an area 6×6 Km2. The traffic is generated using Poisson's arrival process and an exponentially decay distribution for call duration. The proposed mechanism is evaluated when a new call is generated leading to the number of handover request being minimized as well. The algorithm efficiency is confirmed and validated by a MATLAB simulation program. In addition, the simulation results verify the theoretical approach, such as enhancement of positioning accuracy and the handover request minimization.