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Because it uses cell towers to transmit calls.

Edit: Just to expand on the above answer. Each tower only covers a small area - microwaves in high doses are dangerous so they have to be low power - meaning they can only cover small areas or 'cell'. When you use your mobile (cell) phone - it connects to the nearest three towers. The towers register the strength of signal from each tower to your phone - when you move about (either by car or walking) the strength changes, and the network finds the next nearest tower to keep you connected. Incidentally - because the network knows where you are (from the signal strength) - they can pinpoint your location anywhereon the planet to within about 10 feet ! Useful if you're lost in the middle of unfamiliar surroundings - and need help!

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Q: Why is a Cell Phone named the way it is?
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