The agreement is also expected to enable the rollout of a 3G service across the country and the partnership with ZTE is part of a joint agreement with Huawei Technologies, worth approximately $1.6 billion, signed last month.
It is expected that both companies will also provide low interest loans to Ethiopia through vendor financing, according to Ethiopian officials.
According to statistics from the World Bank, subscribers across the continent totalled almost 650 million last year, with Africa’s growing telecoms industry serving as a representation of its economic growth.
Acting CEO at state-run Ethio Telecom, Andualem Admassie said the development with the vendors would enable Ethiopia to double subscribers to over 50 million.
"The expansion is vital to attain Ethio Telecom's objective of increasing telecom service access and coverage across the nation, as well as to upgrade existing network to new technology," he said.
Chinese companies have been expanding African presence in recent years, through major developments in both Kenya and Uganda, as well as running mining projects in other countries.
The Ethiopian government allowed for private companies to launch value-added services last year, as the telecoms industry in the country begins to take shape.
According to the Ministry of Communications and Information Technology, the country received applications from over 200 firms to provide the services, with South African group MTN already granted a licence.
The government has however ruled out the possibility of liberalising the telecoms sector.
