Oh thats easy, android uses ( or at least used it in the past ) these services for location.
Android will first try gps to get your location. However, gps needs direct connection to a satellite and can easily be either turned off or not working correctly.
It then tries to triangulate your location using cell towers and their location, which gives a rough estimate on your location.
Then it scans SSID’s that are near to hone down some more on your location, and its this step that needs that data.

Edit: it used to also scan, and save, SSID names with a rough estimate location to fill and update this database. I say used to, cause thats how it worked circa 2009, so idk how it works nowadays