Yahoo Inc and Nokia unveiled a wide Internet services deal, including maps and e-mail service, as the two battle new rivals on the wireless market.
The role of mobile services and software has increased sharply since Apple and Google entered the industry, forcing traditional phonemakers like Samsung and Nokia to hurry to build up their offerings.
Nokia has splashed more than $10 billion in just a few years to build a new business by offering Internet services ranging from music downloads to e-mail, but these have so far won few paying customers.
It's a deeper collaboration than many expected, said MKM Partners analyst Tero Kuittinen.
It could really help broaden the reach of Nokia's email and messaging services in emerging markets, where they already have decent traction.
Under the new deal Yahoo will be the exclusive provider of Nokia's e-mail service, while Nokia will be exclusive provider of maps and navigation for Yahoo.
The two companies said they would also start to co-operate on access to services, beginning by making it easy for people to use their Ovi user credentials across select Yahoo services.
Shares in Nokia were 0.4 percent higher at 8.05 euros after the news, underperforming the 1 percent firmer European technology shares index, while shares in Yahoo were 0.8 percent higher at $15.60.
Last month, Yahoo also struck a deal with Samsung to put its services and software more prominently on cellphones of the world's second-largest cellphone company.
(Reporting by Tarmo Virki; Editing by Dan Lalor and David Cowell)