State owned-Ethio Telecom currently has a monopoly, being the only company to provide voice, SMS and data services.
It has more than 41 million customers in a country with a population of more than 100 million.
Multinational firms, including Safaricom, MTN Group, Orange and Vodafone, have all shown an interest in bidding for licences.
Speaking at the opening of Ethiopia’s parliament, the president said Ethiopia would continue with the economic reforms introduced by Prime Minister Abiy Ahmed since he came to power in 2018.
She said the government was also committed to ensuring that general elections would be held next year, and they would be free and democratic.
Preventing conflicts that have displaced millions of people in recent years was an important task ahead of the elections, the president said.