Major telephone operators such as Telenor and Tre are among vendors selling "positioning services" in family subscription deals.
The company Lociloci uses the service as a main pull for new consumers and have added 5,000 subscribers in the past year.
Lociloci CEO Fredric Gunnarson told TT, "interest is clearly most significant among families with children and it's in that demographic we see an increase."
A new service offered by the network Tre allows parents to choose a zone where their children are allowed to be. If their mobile phone goes outside that zone, an SMS is sent to the parents alerting them.
Some critics say the trend could undermine trust between parents and children. Child psychologist Jenny Klefblom tells TT, "if you need this you don't have a good relationship with your child. You can only protect your child by having a good parental rapport that is based on trust."
She also says knowing where children are doesn't mean parents know what they are up to. "You only get to know where they are. What's the thinking behind that? That sex only takes place in bedrooms and taking drugs only takes place in central Stockholm?"