A system and associated method for optimizing caching period of location data for network based location services. A location caching server receives a location request from a mobile device. The location caching server calculates, pursuant to a predefined calculation rule, a caching period of a location cache entry for the mobile device based on a precision level requested by the mobile device and a service precision level assigned for a type of location service for which the location request was made. The location caching server obtains real location data of the mobile device of the calculated caching period is expired. The location caching server subsequently adjusts the caching period based on a distance traveled by the mobile device pursuant to a predefined adjustment rule, and updates the location cache entry.