Juan Pablo Conti ©RapidTVNews | 26-09-2011

Only a week after launching in Mexico, Netflix is bracing itself for the arrival of a new competitor.

Maxcom Telecomunicaciones, a domestic telco that also has around 100,000 broadband customers, is about to introduce a subscription-based over-the-top (OTT) service. Called Yuzu, the product's commercial debut is scheduled for next week.

Just like Netflix's, Maxcom's service will be offered on a flat-rate monthly fee. At US$10.70 a month, it will be slightly more expensive than what Netflix charges (US$8 a month). However, unlike in Netlix's case, Yuzu's package will not only include archive video material but also live TV output.

Some analysts have expressed doubts about the ability of OTT players to openly compete in the Mexican pay-TV market given the country's relatively slow broadband speeds. While some residential customers in urban populations, mainly in the district capital, are able to access fibre-to-the-home (FTTH) networks offering 100 Mbit/s, the national average broadband speed is only 2 Mbit/s.

But Gabriel Cejudo, Maxcom's vice-president of marketing, said to Reuters that Yuzu has been specifically designed to operate on IP networks offering limited bandwidth. "As long as you get as little as half a mega (500 kbit/s), our platform will work very well," Cejudo claimed.

The company hopes to sign up half a million subscribers during the first 12 months of its OTT service. It will start out with a back catalogue of 500 films at the time of launch, which should gradually grow to around 3,000 titles early next year.

The linear TV service will include 20 channels, among them HBO, Fox and Turner. For the time being, Maxcom has no plans to expand the OTT product to other markets beyond Mexico.