Small Businesses, Big Markets: Digital Opportunities for MSMEs in Southern Africa

Africa is seeing unprecedented development. Rapid urbanization and in-depth digitalization are reshaping the continent's economic landscape, creating historic opportunities for carriers to overcome traditional business bottlenecks and unlock second growth curves.

Africa is one of the world's fastest urbanizing regions, with large numbers of rural migrants fueling the rapid expansion of urban commercial ecosystems. Tens of millions of MSMEs now serve as the lifeblood of local economies. The widespread adoption of mobile networks, continued improvements in digital infrastructure, and the emergence of local digital consumption habits are accelerating digitalization in Africa. The digital needs of MSMEs are growing exponentially, from basic communication to advanced intelligent management.

Major carriers in Africa are witnessing a steady slowdown in consumer business growth as voice and data services reach growth limits. Finding new performance drivers is crucial for these carriers. In this context, expanding into the high-value MSME segment has become key to their transformation. Using their extensive network infrastructure and significant channel advantages, carriers can move beyond the traditional pipe model to offer MSMEs integrated digital solutions that combine connectivity, networking, surveillance, and value-added services. These solutions will not only help fill the digital capability gap of small merchants, support business standardization and intelligent upgrades in the urbanization process, but also allow carriers to enter the enterprise service space, create stable profit sources beyond consumer businesses, and secure key positions in Africa's digital economy.

Field survey: Identifying MSMEs' business needs

To better understand this trend, we focused on South Africa and Kenya, two markets known for their economic activity and mature business ecosystems, conducting a systematic field survey (Figure 1) on more than 3,000 small physical shops, covering typical MSMEs including retail, food services, and salons. Through onsite visits, in-depth interviews, and field verification, we identified common pain points: unstable network connections, lack of internal networking capabilities, weak security surveillance, expensive ICT services, and limited O&M capabilities.

Figure 1: Field surveys on small stores

Key finding 1: Connectivity is vital, but average MSME bandwidth remains low

The survey found that connectivity remains the cornerstone of all digital activities. 77% of surveyed merchants explicitly stated the need for broadband support. Fiber to the home (FTTH) and fiber to the building (FTTB) only cover about 36% of the surveyed population. Most users subscribe to 15 Mbps or lower bandwidth (Figure 2), with monthly communication budgets typically under US$23 (Figure 3). This highlights a significant demand for basic connectivity solutions that are stable and cost-effective.

Figure 2: While 77% of users need broadband, fiber coverage currently stands at 36.4%

Figure 3: Most users subscribe to 15 Mbps or lower bandwidth, spending less than US$23 per month on connectivity

Key finding 2: Small stores urgently need high-quality Wi-Fi services

The survey revealed that indoor Wi-Fi quality has become a major constraint for small stores in South Africa and Kenya. 72% of store owners believe Wi-Fi services are essential for their operations. For the top five scenarios — cafes, hair salons, clinics, electronics repair shops, and restaurants — each store requires an average of two APs to achieve full coverage (Figure 4). However, actual speed tests show that the average Wi-Fi speed reaches only 46.8% of subscribed bandwidth. The lack of professional networking design creates coverage gaps and significant interference indoors, driving urgent demand for high-quality, seamless Wi-Fi coverage.

Figure 4: Top Wi-Fi service scenarios: each store requires an average of two APs

Key finding 3: Security is key to increasing premium prices

Property and personal safety are major concerns in Southern Africa, making security a high-potential value-added service. Our survey in South Africa and Kenya found that nearly 40% of small stores urgently require security cameras, with an average of three cameras per store. In sectors like clinics and mobile phone repair shops, security needs exceed 45% (Figure 5). Small store owners typically pay an average of US$26 per camera. For carriers, entering the security market with contract devices + cloud storage can boost revenue and greatly enhance user loyalty.

Figure 5: CCTV demand is strong across multiple sectors, exceeding 45% in some

Key finding 4: Cashiering and payment services have distinct regional characteristics

The survey found that payment habits in South Africa and Kenya differ significantly.

In South Africa, credit cards are widely used. 91% of small stores support POS payments, and most POS devices are leased. Carriers can consider partnering with banks and FinTech companies to offer integrated packages combining network connectivity and POS machines.

In contrast, digital payment penetration is extremely high in Kenya. 88% of small stores support mobile payment, mainly relying on the highly M-PESA service. However, onsite visits revealed that poor network coverage in some remote areas causes noticeable delays from payment to merchant confirmation, severely impacting the mobile payment experience. The survey also found that as smart device penetration rises, about 30% of stores show strong interest in new payment methods like QR codes. In these markets, carriers can focus on providing stable network support for mobile payment transactions and introduce new solutions like QR code scanners.

Suggestions on carrier offerings: Developing one-stop services of "connectivity + networking + X"

Based on the identified pain points of small stores in Southern Africa and carriers' strengths in connectivity, Huawei proposes the following four recommendations:

• Optimize product portfolios: Offer "connectivity + Wi-Fi + X" one-stop service packages. Beyond stable, high-speed broadband (fiber or 5G), carriers can use Huawei's professional "connectivity + Wi-Fi" solution and networking services to improve the poor user experience from self-managed networks. In addition, value-added products (X) like security surveillance, POS machines, and QR code scanners can be flexibly added to meet different market needs.
• Strengthen ecosystem partner collaboration: For value-added services, Huawei can leverage its global ecosystem experience to bring in suitable partners for carriers, and ensure full solution integration validation to enrich carriers' service portfolios and speed product time-to-market.
• Differentiate through service assurance: For MSMEs, network outages often mean business downtime. Carriers must establish robust O&M response mechanisms and use digital O&M platforms for remote troubleshooting, aiming to resolve issues on the same day and gain competitive advantages through service quality.
• Design differentiated packages for segmented industries: Tailor packages to meet diverse needs across target scenarios, based on product portfolio capabilities (as detailed in Table 1).

Table 1: Package suggestions

Brand promotion: Showcases at AfricaCom 2025

In November 2025, Huawei set up digital coffee shop and digital store experience showcases at AfricaCom 2025 in Cape Town, South Africa. Using Huawei's FTTH/fiber to the office (FTTO) all-optical connectivity and networking solutions, these showcases seamlessly integrated video security and order-taking functions from ecosystem partners. Powered by all-optical Wi-Fi, the showcase featured all-purpose applications like digital ordering, smart payment, AI-assisted DIY latte art, smart attendance, and intrusion detection. This comprehensive demonstration highlighted the full value of Huawei's digital store solution (Figure 6).

Figure 6: Digital coffee shop and digital store showcases at AfricaCom 2025 in Cape Town, South Africa

During the event, the showcase received more than 60 C-suite executives from the region. More than 150 customers from governments, carriers, and enterprises of diverse industries visited the showcases for communication and exchange. Huawei’s showcasing of the "connectivity + Wi-Fi + X" one-stop service solution and face-to-face communication with customers deepened the consensus on the need for collaboration.

Success story: Telkom in South Africa launches a one-stop MSME service package

Taking market research as the starting point and targeting MSMEs — the backbone of South Africa's economy — Huawei has collaborated with Telkom Business to gain deep insights into the real needs of the MSME market and jointly drive the incubation and innovation of digital services.

Figure 7: Telkom Business' MSME package

South Africa has over 3.5 million MSMEs, contributing nearly 40% of the country's GDP and serving as a cornerstone of the local economy. Survey findings show that these businesses face significant challenges, including weak IT foundations, limited budgets, and inefficient management. Telkom has precisely targeted their digital upgrade needs, focusing on key purchasing areas like high-quality networks, video security, and lightweight office facilities. The carrier has developed a one-stop integrated service package for MSMEs that combines broadband, all-optical Wi-Fi, and office automation (OA). The package includes FTTH broadband, FTTO all-optical networking, and One Office OA software, with flexible on-demand monthly subscription options that simplify deployment and lower the entry cost. Compared to traditional models, customer ARPU increases by over 70% (Figure 7), effectively driving business value growth.

Telkom released its one-stop MSME package (Figure 8) at AfricaCom 2025. Huawei helped Telkom build marketing, sales, and service capabilities.

• Precise marketing: Using digital tools to accurately identify potential customers, Telkom improved customer acquisition efficiency by 10% and set up enterprise service areas in more than 150 business halls.
• Extensive sales channels: Telkom expanded its channel ecosystem, mobilizing over 300 partner channels through sales enablement, hands-on training, and in-store sales support.
• Optimal services: Telkom upgraded delivery services, set up local installation and maintenance service centers, and reused home broadband delivery capabilities to complete end-to-end service delivery with just one visit.

The integrated MSME solution is now fully commercially deployed. It serves as a powerful tool for Telkom to reach the government and enterprise market and strengthen its SME business portfolio, while continuing to help South African MSMEs accelerate digital upgrades and drive regional economic vitalization.

Meanwhile, Kenya's Safaricom is leveraging its strengths in mobile payment, mobile subscriptions, and fiber connections to actively explore one-stop services for MSME stores and deploy value-added services across multiple dimensions:

• Fixed-mobile convergence (FMC): With over 50% of the mobile network market share, Safaricom is using FMC packages to boost its fixed network business through mobile network offerings, rapidly acquiring customers and enhancing customer loyalty.
• M-PESA + connectivity: Combining its high mobile payment penetration with store needs for cashiering and connectivity, Safaricom is using payment and connectivity product combinations to expand its presence in the MSME market.
• Expanding value-added services: Safaricom has extended its mature home monitoring services to store monitoring, integrating partners' digital ordering systems to design differentiated service offerings.

Huawei is collaborating with Safaricom to tailor products for Kenya's MSME market, with plans to formally launch a "connectivity + networking + X" one-stop service adapted for the Kenyan market in 2026.

Future outlook: Private line + X drives transformation, enabling carriers to seize the new opportunities offered by MSMEs

In summary, despite their different development stages, South African and Kenyan MSMEs share a common need for stable, high-quality connectivity. Traditional home broadband can no longer support the core business needs of these merchants. With their speed, stability, and security, private lines should serve as the foundation for carriers' connectivity service upgrades. Value-added services like Wi-Fi networking, video security, and purchase, sales, and inventory (PSI) management can address the common pain points of connectivity, Wi-Fi, and value-added services. Meanwhile, as more Chinese companies expand globally, Huawei is ready to serve as a bridge, connecting African carriers and Chinese partners to share capabilities and opportunities.

The "private line + X" model not only helps carriers transform from "pipe providers" into "integrated digital service providers", but can also effectively boost ARPU and strengthen MSME user loyalty through diverse product portfolios and high-value packages.

The MSME market in Southern Africa holds immense potential. We believe that by strengthening connectivity and empowering MSMEs, carriers can unlock new growth, drive business success, and create lasting social impact across Africa.