I'm currently pondering an idea that popped into my head. I'm planning on offering a simple double scheme hosting service. One free, with 20Mb space and 200Mb traffic or so. No bells or whistles, maybe PHP and 1 SQL. This plan is for youngsters getting started with websitedevelopment.
However, I'm also planning on an "upgrade" for that plan, that gets you a bit more space, a bit more traffic, maybe a few more bells'n'whistles, for $2-$3/month. (These are approx. prices as the service will not be in the US and not in $ )
The big sellingpoint however is payment. I was planning on recieving payment via SMS (or TEXTs as they may be called). Or "overpriced" SMS as it's called in the business. That means, if someone wants to keep their plan, they text "HOST <ID>" to a specific number and their plan gets renewed and they are billed $2 on their phonebill, or reduced from their prepaid.
My problem however is automating the process that renews the accounts, so that I don't have to manually check each month who paid their bill and not. That could work with 10-20 accounts. But if I should be so lucky as to get over 100 customers, that could be tiresome.
Something that no one seems to have mentioned yet is advertising. This service would seem to be targeted at a very specific group, that probably wouldn't be covered by a lot of the free advertising options out there. You might have to put a substantial amount of money into this before you start getting the clients you want and can see a profit.