LAKE WENCHI, Ethiopia—In the green highlands here southwest of Addis Ababa, farmers like Darara Baysa are proud owners of cellphones that run on a network built by China's ZTE Corp.
The trouble is, they have to walk several miles to get a good signal. "The network doesn't work well," says Mr. Baysa, a former army sergeant, stopping on the unpaved road near his home to show his hot-pink smartphone.
Among other troubles: Ethiopian government officials have in recent years complained to ZTE that the company's contract for building the network requires Ethiopia to pay too much, say people familiar with the discussions.
The Ethiopian network's glitches underline the broader troubles that sometimes face poorer nations as they borrow heavily to invest in telecommunications, roads, utilities and other infrastructure to help lift them out of poverty.
China's financial firepower helps its firms win many of these contracts. But in agreeing to such deals, some governments appear to have flouted rules meant to foster sound public investment. When countries sidestep such rules, say experts at institutions such as the World Bank, big projects often cost more and are more likely to be poorly executed.