The free-to-air broadcaster will produce the news shows at its Broadcast Drive headquarters and transmit them by an optical-fibre link to NOW Broadband TV.

The venture is expected to be launched in late November.

'It is really a win-win situation for both companies because NOW do not have to set up their own newsroom in which they may have to hire 200 to 300 people,' said ATV senior vice-president for news, Peter Kwan Wai, who will also be in charge of the NOW broadcasts.

'We [ATV] can expand our existing staff to include more staff to do the daily reporting and special programming. It will be added value for us.'

NOW Broadband, a subsidiary of PCCW, approached ATV for discussions late last year.

'The main idea for them is they do not have much local programming for the time being, so they would like us to join in and produce a 24-hour news channel ... so that they can attract more subscribers,' Mr Kwan said.

The 100 staff will be employed on permanent contracts with ATV and join its 200-member team.

'All of them will be working as a pool for ATV News and then we will produce a separate 24-hour channel for NOW Broadband TV,' he said.

The webcasts, which will be in Cantonese only, will place more emphasis on financial news and could include talk shows.

Mr Kwan said, 'I am very optimistic about the long-term prospects because they [NOW] already have the basic subscribers to Netvigator and so the networking has been done.'

The subscription fee for the news channel has not yet been fixed.

Rival network Cable TV's vice-president of external affairs Garmen Chan said: 'Competition is not new to us. We have been competing for ... viewers since day one, against TVB and ATV. It is just now there is competition for the pay-TV market but ... I mean we have been anticipating it.'