The Pawtrack collar has a GPS receiver built into it. 

This receiver is located on the part of the collar to go on to the back of the cat’s neck, this is to give the receiver a clear view of the sky so it can get messages from the satellites easier and hopefully obtain a more accurate GPS position.

While the Pawtrack collar is connected to the GPS network, the LED will flash red once every 10 seconds. When the collar is searching for the network, it will flash red once a second, and while the collar is generating a position it will flash red twice a second.

For more information on how the receiver work please have a look at "How does GPS work?".