The cable operators, in a haste to install STBs (set top boxes) have overlooked a crucial step that of filling in the cable access form (CAF) before it, the report said.
"The purpose behind mandating digital addressable system was to identify the actual number of cable viewers of the country. But with most customers not filling in the form, the purpose remains defeated," it added.
"The delay in implementation of the various phases of the digitisation has meant the promised jump in the subscription revenue and average revenue per user has not materialised," it added.
Even a year after of implementing digitisation in major cities, the cable and broadcast sector is still trying to 'iron out the creases and get system in place'.
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Moreover, the report also raised questions over the quality of STBs installed by cable service providers.
"People in the city are complaining about STBs installed in their residences and commercial organisations. Visual and sound disturbances coupled with channels going off air from time to time have left viewers unhappy," the report added.
Last week, Information and Broadcasting Minister Prakash Javadekar had met Indian manufacturers to produce STBs to meet the growing demand and sought their suggestions to take the indigenisation process forward.
The government has already completed the second phase of digitisation, which involved digitising 1.6 crore cable TV houses in 38 cities by April 1, 2013.
The third phase of digitisation has to be implemented in all other urban areas (municipal corporations/ municipalities) except cities or towns or areas included in Phase I and II, by September 30, 2014. The rest of the country will be covered under Phase IV of digitisation by December 31, 2014.