hey sonaiko
by looking at the diagram, im guessing by placing the cell phone near the coil which is wound like an inductor, the electromagnetic waves the cell phone uses to communicate with the tower (when it rings!) induce a small voltage in the inductor, this is probably a few milivolts, this is amplified by the self biased transistor network, these arrangements usually have a gain of somewhere between 70 and 150 i think. This is passed onto the 555 timer to trigger it and an indication is given in the output.
Hope this helps