Ethiopia solicited bids in 2020 for the country's first private telecoms licenses.

And the sector initially attracted interest from a range of major operators.

But security problems and concern about the government's commitment to opening up a tightly-controlled economy are deterring possible investors.

Potential fiscal incentives have failed to materialize.

Last month, regulators suspended the process to issue a third telecommunications license after potential investors said the conditions on offer needed to be improved.

France's Orange told Reuters it had withdrawn from the process to buy an up to 45% stake in Ethio Telecom.

Safaricom said it had signed up 7 million users, including 4.1 million active customers over the past three months after launching its network in October 2022.

But according to a Western diplomat and an industry insider, who both spoke on condition of anonymity, one major struggle for Safaricom has been getting equipment through customs.

One source suggested it was an example of the government favoring Ethio Telecom at Safaricom's expense.

Safaricom, owned by the Kenyan government, South Africa's Vodacom and Britain's Vodafone, did not comment on this point nor the specific challenges it faces in Ethiopia.