A Marriage Made in Heaven

Chris is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

You probably have been approached by a representative from one of these companies before.  When someone invites you to a meeting or a conference call what pops into your head?   Your friend possibly has told you it's the best thing out there since sliced bread.  You look at this person and see their motivation and enthusiasm just bursting all over the place.  If you have attended any of these meetings or conference calls you can see the cult like dedication the company representatives have.

There are several companies that use this type of marketing.  From old school Herbalife to Amway.  Some of the top companies that use direct marketing to help promote their products are USANA Health Sciences, Avon, and Nature's Sunshine Products. These companies offer a form of high quality nutritional products.  They sell products that can be found at almost any store you visit from drugstores to local convenient stores.  These companies have taken ordinary products that millions of people buy every day, repackaged them, and sold them via their hyped up direct sales agents.

Now what happens when you cross a network marketing company with a wireless service provider?  In 2002, only 47.4% of the U.S. territorial population owned a wireless cell phone but in 2012 that has jumped to 101%!  These numbers are from the ctia.org website and show the amazing growth in the wireless industry and how cell phones have gone from a luxury item to a necessity item.  With more active cell phones than there are people in the United States, this gives potential for huge growth when combined with the momentum of a network marketing company.

With only four major players in the wireless market AT&T (NYSE: T), Verizon Communication (NYSE: VZ), Sprint Nextel Corporation (NYSE: S), and Deutsche Telekom’s (NASDAQOTH: DTEGY) T-Mobile, there is room to grab customers from other carriers.  The top two players use their size to market their service.  Sprint uses unlimited data service to gain customers.  Deutsche Telekom / T-Mobile has decided to look to direct marketing to help boost their numbers.  They signed with a company called Solavei to help market their wireless service through network marketing.  Now, the amazing thing is this company opened in September and already has 40,000 plus members.  This is huge, as the potential is just amazing as the word about Solavei gets out the number of people switching over will grow.  Thus creating a huge sales force without the costs of hiring.   The company is only charging $49.99 for unlimited talk, text, and data saving customers, much lower than service with the big two carriers.

My final thoughts as Deutsche Telekom has taken a huge step in the correct direction in kick starting its wireless subscriber unit in the United States and only offers even bigger potential as it goes overseas.  Owning Deutsche Telekom offers a great opportunity as the potential rumored spin off of T-Mobile after closing its deal with MetroPCS Communications gives you the possibility of owning a stock in Europe and the United States.  Now this is only rumored, but Deutsche has been trying to shed its United States unit since the failed takeover.  The dedication and drive a direct sales team offers will only help the company move up and up.  Plus with the economy the way it is currently, low price and the opportunity to earn money just by telling others will make this company a marketing machine.


fitnessdad has positions in T but no other stocks mentioned above. The Motley Fool owns shares of AT&T.; Motley Fool newsletter services recommend AT&T.; Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.

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