The prepaid phone sector in the United States is facing a financial crisis.
That’s according to an analysis by Credit Suisse that analyzed data from a number of prepaid companies.
The study, released Thursday, found that the prepaid industry is on the verge of a collapse, and that many consumers are losing out on the most affordable wireless plans in the industry.
According to Credit Suse, nearly 30 percent of the more than 100,000 Americans who signed up for a prepaid phone plan in the fourth quarter of 2016 had to pay over $3 per month to use their plan.
That is more than double the amount of the time that consumers pay for traditional phone plans.
“While the consumer base for prepaid phones is expanding, the amount consumers pay to use them has decreased over the past year,” Credit Suses co-author and chief economist Benjamin Shugart said in a statement.
“These findings indicate that many prepaid consumers are paying more for the same plan they are paying less for.”
Shugart’s study found that in the four-month period ending March 31, prepaid customers paid $3.25 per month on average for a $20 per month plan, while traditional phone customers paid just $1.20 per day.
Shugarts analysis found that nearly a quarter of prepaid customers are paying over $30 a month for the plan.
According to the study, this is an unprecedented financial crisis for prepaid companies in the U.S. The financial crisis that is affecting the prepaid sector is largely due to the loss of customers from traditional phone carriers.
For most of the past five years, the number of wireless phone subscribers in the country has grown steadily, but there is a dearth of competition in the market.
The U.K. and Germany have seen growth in the number and quality of their plans, while prepaid carriers in Europe have experienced a significant drop in their numbers due to competition.