What is the need of location reporting procedure over S1-AP interface and also how it work?

Question

Why MME need this procedure even in case of UE is in ECM-Connected mode ?

Answer 1

The purpose of having "location reporting procedure" over the S1-AP interface, is to get location for an UE at the cell level granularity. MME uses dedicated signaling for this procedure. There may be various reasons for the execution of this procedure. One of them, I know that is "Location based charging".
An eNodeB may have max 3 cells and operator wants to apply different charging rules or policies for one of the cell. In the case, this procedure helps to operator to met their intention.

For more details, please go through 3GPP 36.413 specification.

Answer 2

LTE macro can support maximum of three cells. When an UE moves from one cell to another cell of the same eNodeB, handover doesn't happen. It is just a cell change. A LTE macro cell covers a large geographical area.

Now assume an eNodeB 'E' has three cells c, c+1, c+2 and cell c covers a stadium and another cells are outside the stadium. During a match most of the crowd will be at cell 'c' and probably less crowd at other cells. Operator would like to charge differently. At this moment, MME ask to eNodeB to send a location report for a set of UEs or all the UE's belongs to same eNodeB. Once eNodeB receives this message, it store this message and as soon as an UE moves to cell c, eNodeB report to MME. MME prepares and sends "Change notification message" to SGW and SGW in turn forwards to PGW/PCEF.

This is one of the use-case that I know. There may be another set of use-cases.