The European Investment Bank (EIB) has approved loan of €35-million (approximately US$40 million) to Telkom Kenya, the East African country's third biggest operator.

The company plans to use the loan to expand its mobile and data services, and expects an increase in market share.

While the operator has not revealed specific details as to how it intends to achieve goals using the loan or relevant timeframes and/or contractors, according to the terms of the loan agreement the company will increase its 3G and 4G coverage; and invest in its Fibre-to-the-Building (FTTB) network.

Telkom CEO, Mugo Kibati said "The strategic support from the EIB will give impetus to Telkom's data network expansion, that has seen Telkom consistently enhance indoor coverage, expand our 4G network, optimise our 3G network, thereby boosting our capacity to handle mobile data traffic, in response to growing customer demand."

According to the latest figures released by the Communications Authority, Telkom Kenya, jointly owned by Helios Investment (60%) and the government of Kenya, controls about 9% of the local telecoms market with 4.1 million subscribers.

Telkom recently initiated a data price war with its competitors, prompting the industry's dominant player Safaricom (which controls about 70% of the market) to reduce the cost of its data.

Vice President of the EIB Ambroise Fayolle said: "This loan will also benefit its fixed broadband network; a service which is widely seen as a basic need for businesses to be competitive in a global market. Our backing will help to provide potentially millions of people with access to data networks, which nowadays is a basic condition for doing business in a connected world."