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2016-05-17

PwC: Global internet inclusion could lift 500m out of poverty, and add over $6trn to global GDP

Internet growth has slowed because of barriers to online access and usage in
the telecom, content and retail markets
LONDON, May 16, 2016 (GLOBE NEWSWIRE) -- Global inclusion in the Internet
could bring seven percent of the world's population - 500 million people -
above absolute poverty levels, and add US$6.7 trillion to global economic
output, according to a new study by Strategy&, PwC's strategy consulting
business.

The study, for Facebook, encompassed 120 countries over a 10-year period and
describes how the Internet could change as more people from developing
markets get online. It examines how barriers to accessing the internet could
be removed, and how the internet could change as more people from developing
markets get online.

Despite the ongoing digital revolution, the number of new Internet
subscribers, most of whom are in developing nations, has slowed in recent
years, only growing in single digits since 2013. This leaves 4.1 billion
people disconnected from a modern economy that would benefit by over US$6
trillion with their participation.

According to the report "Connecting the World", global Internet inclusion
would mean that there could be five Internet users in developing markets for
every one user in developed markets, compared to the current ratio of two to
one.

Bringing the whole world online would create huge benefits for developing
countries and for businesses over the coming five years, including:

* Social and economic improvement for over 4 billion people
* An additional global economic output of US$6.7 trillion
* A $400 billion growth opportunity for telecom operators
* A $200 billion opportunity for content providers

"Enabling universal access to the Internet is one of the fundamental
development challenges of our era," says Bahjat El-Darwiche, co-author of the
Strategy&study and a partner with PwC Middle East. "To allow people in the
developing world to participate fully in the modern economy and benefit from
the Internet's transformative impact, we need to make Internet access easier
and cheaper, provide people with compelling reasons to go online, and support
people as they discover the Internet and use it for the first time."

Progress has been slow due to barriers including the cost of coverage,
existing infrastructure speed and capacity, and the need to implement new
infrastructure where it does not exist. The study finds that with retail
Internet prices needing to fall nearly 70 percent to make the Internet
affordable to 80 percent of the population, action is required across key
areas of connectivity, content and the retail service to bring more people
online:

* Replacing current 2G networks with 3G or 4GLTE could bring a 60-70%
reduction in the cost per MB to serve developing markets, making it
profitable for operators to provide internet services, and opening up the
internet to over 2bn people.
* Providing content through a series of local high speed networks, would make
it affordable for a further 300m people.
* Offline distribution of content, including through national and regional
data exchanges would improve access and affordability for a further 170m
people
* Governments offering content focused on education, social services or
business opportunities could create an incentive for a further 200m to go
online
* Brand or subscriber subsidized access, for example learning centers, could
bring another 500 million online globally

"The inclusive Internet of the future will be different from today's
Internet," says Mathias Herzog, Strategy&report co-author and principal with
PwC US. "It will be linguistically, culturally, and economically more adapted
to the needs of the previously unconnected, and it will be the primary
channel for the provision of critical services to those most marginalized in
today's physical economy. The reasons for going online will tilt towards
productivity, micro enterprise, and education, and there will be growth in
e-commerce that sources from and sells to the poorest consumers."

Reaching the world's remotest and poorest inhabitants will require using
innovative and disruptive technologies. "We need to find new approaches in
the markets for connectivity, content, and retail if we are to harness the
power of the Internet for development and poverty reduction," says Andrew
Bocking, Product Manager for Internet.org at Facebook.

Notes
To learn more about Connecting the World: Ten mechanisms for global inclusion
, visit www.strategyand.pwc.com/ctw. A copy of the global study is also
available from the media contact. Additional multi-media assets are also
available.

About the Connecting the World
report: The report, "Connecting the world: Ten mechanisms for global inclusion
" was prepared by Strategy&, part of the PwC network for Facebook Inc. to
assess the barriers to Internet adoption and consider mechanisms that could
accelerate Internet penetration in support of Facebook's Internet.org
initiative.

The Strategy&Digital Prosperity Project brings together leading experts to
provide thought leadership at the intersection of technology and economics.
The project has developed measures of digitization and digital maturity to
better inform policymakers and business leaders on how to use digitization to
further economic and social progress.

About Strategy&

Strategy&is a global team of practical strategists committed to helping you
seize essential advantage. We do that by working alongside you to solve your
toughest problems and helping you capture your greatest opportunities. We
bring 100 years of strategy consulting experience and the unrivalled industry
and functional capabilities of the PwC network to the task. We are part of
the PwC network of firms in 157 countries with more than 208,000 people
committed to delivering quality in assurance, tax, and advisory services. To
learn more about PwC's Strategy&, visit www.strategyand.pwc.com.

© [2016] PwC. All rights reserved. PwC refers to the PwC network and/or one or
more of its member firms, each of which is a separate legal entity. Please
see www.pwc.com/structure for further details.
Contact:

Kiran Chauhan
Strategy&, PwC's strategy consulting business
T: +1 646 890 8695
E: kiran.chauhan@pwc.com

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This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: PwC via Globenewswire

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