building a small gsm network
Cheap hardware??? I don't think there is cheap hardware...to build a GSM network, even the scale is small, you still need HLR, AUC, VLR, MSC, BSC, and BTS.
Unless you can write all the software by yourself, then you might put all to a single server. This is almost impossible, as you need to do work which is done by whole Ericsson's or Siemen's R&D team. However, some of the interface is not widely available in the market, like E1 and STM1.