Spoofing was an issue for cheating but so was GPS data quality: spend enough time in a metro area and you're ready to tear your hair out because of constant drift.
Combine that with Niantic's shift from freely giving equipment away to forcing players to "glyph hack" (repeat back a series of proprietary symbols) and casual players dropped out of the game.
Gamers develop sophisticated cheats, and, yes, multi-player game companies do look for outliers. It's not a solvable problem but it is an advanced arms race.
Unless that source of information is not on the phone, it will have the same problem. And I'm not sure I want cell phone companies reporting in to external parties where my phone is.
I can imagine there'd be a number of mitigations you could do, like detecting impossibly fast travel times between locations. Although cheating then would be a matter of taking it slowly.