It is hoped the new technology will clamp down on illicit handsets, which officials say can be used by prisoners for purposes including drug supply, maintaining outside criminal networks and terrorizing victims, Sky News reported.
Justice Secretary David Gauke said, "As criminals look for new ways to smuggle contraband into prisons, it is vital that we stay one step ahead, and this kind of technology will help prevent them operating from their cells.
"This is vital to ensuring prisons are places of safety and rehabilitation, where offenders can turn their backs on crime for good."
Because of security reasons, only basic details about the technology have been released by the MoJ:
Prison staff can also track data over time to watch for emerging patterns, such as the timing of drug-smuggling plots.
The intelligence is analyzed and in conjunction with law enforcement partners can lead to arrests.
Following a successful six-month trial of the technology in one jail, it is now in use in five. The locations have not been revealed for security reasons.
Authorities have identified the illegal use of phones as one of the most significant threats facing the prison service.
In the 12 months to March last year, there were 10,643 incidents where mobiles were found in prisons in England and Wales, a 15-percent increase compared with the previous year.
Criminal gangs have deployed a range of tactics to exploit the lucrative prison contraband market.
Last month, three dead rats stuffed with mobiles and drugs were found at HMP Guys Marsh in Dorset.
The MoJ said the new technology is part of a wider multimillion-pound strategy to restore stability to prisons.
Other measures include security scanners, improved searching techniques, phone-blocking technology and a financial crime unit to target "criminal kingpins" operating in jails.