geographical location?

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It matters because where your hosts' server is can affect it's speed of connectivity. The more telecomunications backbones in the area (that it connects with) the better the speed should be.

That's a matter of connection though, not actual location. Physical location itself shouldn't matter at all, as long as the server itself is well cared for.
 
If the infrastructure is present and well maintained, then it shouldn't be a big issue. The key is whether or not the company that is supporting you can properly communicate with you if there are problems so you aren't left hanging and wondering what is going on.
 
I think it won't be a big problem because we may never know in which country the maximum amount of traffic comes from. Further if the hosting servers are well maintained and adequate there is nothing to fear if the hosts is in different country.
 
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One advantage is that, some countries offer it cheaper than the ones offered locally. One disadvantage is that it will not be cheap to call them up if you really need to.
 
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