This sounds very similar to the phone network that the Chaos Computer Club uses at their events, the biggest one being the Chaos Communication Congress. Everyone who wants can bring a DECT or GSM phone and register a 4-digit extension, and each congress, several thousand people do. The whole venue, as well, as some nearby hotels, are littered with DECT and GSM base stations. There's also bidirectional interconnectivity to the regular phone network. It's always one of my favorite parts of Congress, but it has kind of ruined me since I have trouble taking tech conferences without their own phone network seriously. :)
(Cave-at: I'm not involved with the technical implementation. I just know the system as a user.)