Africa Online, the company's African subsidiary, will expand to Tanzania and Uganda next month. It also has plans to initiate operations in Egypt and South Africa by year's end.
"Specifically, the [$12.5 million] will go toward building infrastructure, including local PoP sites, office space, and additional employees," said Prodigy spokesman Mike Darcy. Prodigy currently has 100 employees in its offices in Africa.
The online service provider established its first African-based office in Nairobi in 1994. That office has since turned a profit, but it is the only profitable office there, said Darcy. He added, however, the company expects the others to be profitable by year's end.
"The African continent is sometimes overlooked by companies as an important growth market. That would be a mistake," said company president and CEO Paul DeLacey in a statement. "Africa offers great opportunities, particularly in the important areas of telecommunications and the Internet."
"The Internet is the single most important tool that will open Africa up to the rest of the world. It is the future of communication worldwide, and Africa is not as far behind as some people believe," Gates said.
Microsoft's expansion in Africa will be centered on South Africa as a base. In February, Microsoft opened offices in Kenya and Cote d'Ivoire (Ivory Coast) and said it has plans to open ten more in the next three years, Gates added.
Prodigy now serves businesses and individuals in East and West Africa through its Africa Online subsidiary, which operates offices in Nairobi and Mombasa, Kenya; Accra, Ghana; and Abidjan, Cote d'Ivoire.
Paul Tucker, senior vice president and general manager of Prodigy International, said, "We see Internet growth in Africa being spurred not just by large corporations, but more significantly by small and midsized businesses, as well as progressive individuals. These segments need to be able to communicate and to access information quickly." Prodigy generally targets small to midsized businesses as well as individuals.
"Because the market is so underdeveloped, at this point, we are going for everything," added Darcy.
Prodigy began offering full access to the Web in early 1996, and said that its Africa Online subsidiary currently serves 85 percent of Kenyan businesses with Internet access.