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I want to track device using triangulation algorithm. It works fine with 3 BTS stations at 3 different locations. What should I do if only 1 or 2 BTS exists.

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With less than 3 sources, you cannot identify the location uniquely. However, if you can put some constraints on the speed at which the device can move, you can use the previous location and dead reckoning to guess the current one.

See also the answer to this question: Trilateration using 3 latitude and longitude points without their distances

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you mean we can use IMU (Accelerometer and Gyroscope Devices) to do this? We cannot use the IMU device for too long as its error gets increases. What if we triangulate in case of 3 BTS that gives us exact a point or a very small area and in other cases like only 1 or 2 BTS found or we get huge area we use that IMU device. – AndroidLearner Jul 8 '12 at 5:37
yes, use them together. The 2 BTS case gives you two possible points (if you don't care about the height), while with one signal, you have a whole circle's circumference to choose from. IMU will help pick the best location estimate. – lynxlynxlynx Jul 8 '12 at 14:15

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