Vodafone Group and Softbank, the Japanese internet company that recently acquired Vodafone's Japan unit, have agreed to establish a joint venture to develop and procure handsets and content.

The two companies will each invest €39 million ($50 million) in the venture, which will work in three main areas, said Masayoshi Son, president of Softbank at a Tokyo news conference.

The first will involve joint development and procurement of key mobile handsets, Son said. By working together Softbank hopes to be able to exert more pressure on handset makers to develop leading-edge devices for its services, as potential sales volumes are much higher than those for its Japanese domestic competitors.

Additionally the venture will develop a mobile portal and basic software for use in mobile phones and the joint procurement of mobile content such as sports coverage and films.

"So far most information has been text based but from now on we think it will be more video based," Son said. "If we can work together and procure content it will be very good in the future."

While Softbank stands to benefit from the much greater size of the Vodafone group, Vodafone will gain from access to new technologies developed for the Japanese market. This was a major reason why Vodafone came to Japan in the first place and the deal will allow the company to remain active in Japan, said Arun Sarin, chief executive officer of Vodafone Group.

The deal places Vodafone in a position reminiscent of its place in Japan several years ago. It previously held stakes in local carriers and was able to gain access to technology through those stakes but the company found it difficult to compete in Japan.

"Japan is a leading market so we believe Vodafone can utilise the strengths of the Japanese market," said Son.

Softbank acquired Vodafone's Japan unit in a ¥1.8 trillion deal announced in March this year.