About 6-8 years ago, (right after they passed a law in the US that all cell phones had to have sim cards), a whole slew of articles popped up (from reliable sites), proving that the phone could be tracked. The data even included a time line, so they could tell how long you spent at each place during the day.
I never saw any proof that the data collected, was being monitored... but it is collected.
I would imagine that the govt. thought it was a good idea to have the data available if they ever needed it.
Anyway, I voted for #2.