The sleeping cell problem is one of the most critical issues for cellular deployments, consisting in the outage of a cellular station, which, conversely, works properly from the point of view of the monitoring system. This problem is often not detectable by the operators, and it could lead to severe degradations in the service provision in the long term. This issue has been commonly managed by the centralized analysis of network performance indicators. However, those solutions are unsuitable for the new ultra-dense small cell scenarios that will characterize 5G deployments. New approaches are required to cope with the high level of cell overlapping as well as the huge number of sites to be managed. In this context, a novel mechanism to detect sleeping cell issues is proposed, which takes advantage of the recent advances in indoor localization as well as monitoring data obtained by user equipments. In addition, a root cause analysis of the cell failure is presented. The capabilities of the proposed approach are evaluated in a realistic key scenario, showing the feasibility and usefulness of the proposed location-based approach.