State-owned operator Ethio Telecom launched a fifth-generation (5G) mobile phone service on Monday in a key step ahead of competition from new entrants in an industry that has been closed for international players.

Next-generation 5G networks can provide data speeds at least 20 times faster than 4G and are seen as important for emerging technologies like self-driving cars and enable communication and interconnectivity between smart devices.

Ethio Telecom CEO Frehiwot Tamru said the service will first be available in the capital Addis Ababa, before eventually spreading to other parts of the country.

"The 5G service is launched in selected places in Addis Ababa," she said at a launch event. "In the coming 12 months, we will have 150 5G sites in Addis Ababa and outside Addis Ababa."

Frehiwot did not say how much deploying the network would cost.

Ethio Telecom, which has 64 million subscribers across the nation, said in a separate statement that China's Huawei Technologies was its equipment supplier for the network.

It recorded a 6.7% rise in revenues to 28 billion birr ($544.40 million) in its half year to Dec. 31.

The government launched a tendering process for selling a 40% stake in Ethio Telecom to private investors last June.

In March, the government said it had postponed the planned partial privatisation because of the prevailing economic environment domestically and globally.

In December, industry regulator Ethiopian Communication Authority said it had also suspended a tender process for a second telecommunications licence, which it said it would relaunch in the "near future".

The Horn of Africa country of about 110-million people sold only one of two full-service licences on offer in May 2021.

The winner of the first licence, a consortium led by Kenya's Safaricom, Vodafone, and Japan's Sumitomo, is in the process of setting up its network ahead of a planned commercial launch due anytime now.

The licences are considered a big prize in the country's push to liberalise the economy, which had been one of the world's last major closed telecoms markets.