Hongkong Telecom says it will spend $300 million purchasing films for its new video-on-demand (VOD) service over the next three years and has hit out at similar products planned by its rivals. The VOD service will show films sourced from a joint venture between film producers Golden Harvest Entertainment and China Star Entertainment. Telecom said it would soft-launch VOD - which provides a choice of movies piped directly into the home - to selected residential areas in July. A fully fledged commercial launch would take place in October. Hongkong Telecom Interactive Multimedia Services managing director William Lo yesterday said the strength of the service would be in its variety of local films. 'No matter how good your technology is, at the end of the day you have to have good content - and we believe with these two partners we now have that,' he said. Hongkong Telecom IMS has signed a five-year film agency and supply agreement with Golden Harvest and China Star to provide Cantonese movie titles. The VOD service is expected to provide customers with a choice of between 60 and 80 film titles, which can be viewed at any time. Mr Lo said customers would be charged between $100 and $150 a month for a set-top box to decode the incoming telephone signal, and another $20 to $30 for every film they viewed. He was confident the VOD service would break even in its fourth year of operation. Mr Lo said Telecom was looking to gather 88,000 customers by the end of the first year and reach 280,000 customers by the end of the second. Last week, a consortium involving Mei Ah International, New World Development, Hanny Holdings and Win's Entertainment said it had teamed up to provide its own VOD service for Hong Kong. Mr Lo said Telecom's service would be superior as it would provide films to viewers instantaneously, whereas the Mei Ah consortium would require customers to wait about 10 minutes for the film to start. 'That would make their service more like Wharf Cable's near video-on-demand, than true video-on-demand,' he said. He also said that preliminary studies undertaken by Telecom showed Mei Ah's service would only be able to provide between eight and 10 film titles at any one time - far less than the number provided by Telecom. Hongkong Telecom is planning a number of other services as part of its interactive television. These services would include home shopping, home banking and music-on-demand.