Am_Fear, are you using GPS on you phone at all?
The iPod Touch isn't a phone and doesn't have a inbuilt internal GPS + GLONASS.
It has multiple GPS applications installed such as Memory Map along with the mapping database installed in the iPod memory. To turn off the external GPS, I push the power button on the Garmin Glo BT GPS, the electronic map viewing and scrolling will still work even with location services turned off and in flight mode.
To make and receive phone calls on the iPod I use the ZTE MF-60 MiFi and the 3CX app configured for a Draytel VIOP account. Calls to the US from the UK typically cost about 1 penny per minute or about 1.5 cents PAYG. Calls from the UK to the UK are actually more expensive. Draytel also offers a PC application for free secure encrypted voice comms to other Draytel users using the same application if required.
The ZTE-60 can also be used with a directional Yagi antenna (rather than a circular radiator antenna) for better location security especially on the edge of a cell network.
The Garmin and ZTE devices can also used in conjuction with a Samsung notebook PC.
Contract iPhones are way too expensive and the money that was saved was used to purchase some nice AKG K702 headphones and FiiO E07K DAC Headphone amplifier both of which still work with the notebook PC.