The best servers out there are the [FuN] servers. They are UK based, and support several of the latest games (needforspeed: underground, call of duty, enemy territory, RTCW etc etc etc. Most servers are public and free. The few companies left doing this seem to be non-profit organisations now.
To compete with people like this you need to be ready to put in pretty big money. If you can't put up at least 12 high quality servers, a site, forums, chat communities and more, i wouldn't bother trying. Pay for use servers do not generate an income, why would any sane gamer pay to use a server? I'm a pretty serious gamer, and i wouldn't pay.
This element of online gaming is not easy to make profitable IMHO.