The purpose of this discussion is to provide an understanding of the Company's financial results and condition by focusing on changes in certain key measures from year to year. Management's Discussion and Analysis is organized in the following sections:

· Forward-Looking Statements
· Overview
· Summary of Results and Recent Events
· Critical Accounting Policies and Estimates
· Recently Issued and Not Yet Effective Accounting Pronouncements
· Results of Operations - Three and Nine Months Ended June 30, 2008 Compared to Three and Nine Months Ended June 30, 2007
· Liquidity and Capital Resources - Nine Months Ended June 30, 2008

NOTE REGARDING FORWARD-LOOKING STATEMENTS

The statements contained in this Management's Discussion and Analysis that are not historical in nature are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. In some cases, you can identify forward-looking statements by our use of words such as "may," "will," "should," "could," "expect," "plan," "intend," "anticipate," "believe," "estimate," "potential" or "continue" or the negative or other variations of these words, or other comparable words or phrases. Factors that could cause or contribute to such differences include, but are not limited to, the fact that we are dependent on our program providers for satellite signals and programming, our ability to successfully expand our sales force and marketing programs, the need for additional funds to meet business plan expectations, changes in our suppliers' or competitors' pricing policies, the risks that competition, technological change or evolving customer preferences could adversely affect the sale of our products, unexpected changes in regulatory requirements and other factors identified from time to time in the Company's reports filed with the Securities and Exchange Commission, including, but not limited to our Annual Report on Form 10-K filed on December 21, 2007 for the period ending September 30, 2007.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements or other future events. Moreover, neither we nor anyone else assumes responsibility for the accuracy and completeness of forward-looking statements. We are under no duty to update any of our forward-looking statements after the date of this report. You should not place undue reliance on forward-looking statements.

In this discussion, the words "MDU Communications," "the Company," "we," "our," and "us" refer to MDU Communications International, Inc. together with its subsidiaries, where appropriate.

OVERVIEW

MDU Communications International, Inc. concentrates exclusively on delivering state-of-the-art digital satellite television and high-speed Internet solutions to the United States multi-dwelling unit ("MDU") residential market, estimated to include 26 million residences. MDUs include apartment buildings, condominiums, gated communities, universities, nursing homes and other properties having multiple units located within a defined area. We seek to differentiate ourselves from other service providers through a unique strategy of balancing the information and communication needs of today's MDU residents with the technology concerns of property managers and owners and providing the best overall service to both. To accomplish this objective, we have partnered with DIRECTV and have been working with large U.S. property owners and real estate investment trusts ("REITs") such as AvalonBay Communities, Trammell Crow Residential, Roseland Property Company, KSI Services, The Related Companies, as well as many others, to understand and meet the technology needs of these groups.

The Company earns its revenue through the sale of digital and analog satellite television programming and high-speed Internet services to owners and residents of MDUs. We negotiate long-term access agreements with the owners and managers of MDU properties allowing us the right to provide digital satellite television and high-speed Internet services, and potentially other services, to their residents, resulting in monthly annuity-like revenue streams.

The Company offers two types of satellite television service and its own high speed Internet service branded as the Company's "@mymdu" broadband service.

The first type of satellite television service is Direct Broadcast Satellite ("DBS") (also called Direct to Home ("DTH")) and uses a set-top digital receiver for residents to receive state-of-the-art digital satellite and local channel programming from a centrally installed satellite dish system installed at the MDU property. For DBS deployed properties, the Company exclusively offers DIRECTV® programming packages. From the DBS or DTH offerings we receive the following revenue; (i) a substantial upfront subscriber commission from DIRECTV for each new subscriber, (ii) a percentage of the fees charged by DIRECTV to the subscriber each month for programming, (iii) a per subscriber monthly digital access fee that is billed to subscribers for the set-top box, service and connection to the property satellite network system, and (iv) occasional other marketing incentives from DIRECTV.

The second type of satellite television service is a Private Cable video service, where analog or digital satellite television programming is received at the property by a centrally installed satellite dish system and the programming can be tailored to the needs of an individual property and received through normal cable-ready televisions. In Private Cable deployed properties, a bundle of programming services is delivered to the resident's cable-ready television without the requirement of a set-top digital receiver in the residence. In Private Cable deployed properties, net revenues result from the difference between the wholesale prices charged by programming providers and the price we charge subscribers for the private cable programming package.

The Company provides its broadband service through the use of leased local fiber optic networks and equipment it deploys at properties. From subscribers to the Internet service, the Company earns a monthly Internet access service fee.

We provide the DBS, Private Cable and Internet services on an individual subscriber basis, but in many properties we provide these services in "bulk", directly to the property owner, resulting in one invoice and thus minimizing churn, collection and bad debt exposure. These subscribers are referred to in the Company's periodic filings as Bulk DTH or Bulk Choice Advantage ("BCA") type subscribers in DBS deployed properties and Bulk PC type subscribers in Private Cable deployed properties. In bulk deployed broadband properties this service is referred to as a Bulk ISP type subscriber.

Our common stock trades under the symbol "MDTV" on the OTC Bulletin Board. Our principal executive offices are located at 60-D Commerce Way, Totowa, New Jersey 07512 and our telephone number is (973) 237-9499. Our website is located at www.mduc.com.

SUMMARY OF RESULTS AND RECENT EVENTS

The Company again turned in solid revenue and EBITDA (as adjusted and as defined below) during the third quarter ending June 30, 2008. The Company's revenue for the quarter ended June 30, 2008 was $6,257,780, an increase of 58% over the same period in fiscal 2007. This increase in revenue resulted in EBITDA (as adjusted) growth greatly exceeding expectations. For the nine and three months ended June 30, 2008, the Company reports positive EBITDA (as adjusted) of $1,722,851 and $1,099,831, respectively, which is a considerable increase over the corresponding periods in the previous fiscal year of $343,364 and $55,503, respectively. The Company also generated positive cash flow from operating activities for the three months ended June 30, 2008 of $580,365.

The Company achieved this revenue and EBITDA (as adjusted) growth while decreasing its reliance on the Credit Facility originally entered into on September 11, 2006. In large part this was a result of the Company focusing on adding incremental DIRECTV HDTV and broadband services within the Company's current properties and achieving greater economies of scale in its operations. Additionally, the Company is directing resources towards the improvement of subscriber penetration rates within properties and lowering its subscriber acquisition costs. Despite its decreasing reliance, the Company believed it prudent during this time of volatile markets, to negotiate and execute a term extension and $10 million increase to the Credit Facility, which it did on June 30, 2008.

The Company's average monthly revenue per unit ("ARPU") at June 30, 2008 was $28.42, a 9% increase over the year ended September 30, 2007 of $26.17. ARPU is calculated by dividing average monthly revenues for the period (total revenues during the period divided by the number of months in the period) by average subscribers for the period. The average subscribers for the period is calculated by adding the number of subscribers as of the beginning of the period and for each quarter end in the current year or period and dividing by the sum of the number of quarters in the period plus one. The Company's ARPU has been positively impacted by, (i) the increase in the residual percent under the new DIRECTV Agreement, (ii) the fact that this higher residual percent is based on an increasing DIRECTV ARPU (the average revenue generated by a DIRECTV subscriber was up 8.3% in DIRECTV's fourth quarter to $87.40 per subscriber (as disclosed in DIRECTV's public filings)), and (iii) the increase in installation, wiring and other revenue realized from the upgrade of properties to the new DIRECTV HD Platform.

The Company's primary focus again during the quarter ended June 30, 2008 was to upgrade subscribers to the new DIRECTV High Definition Platform ("HD Platform") in properties the Company currently services. During the quarter ended June 30, 2008, the Company upgraded 7,317 units in 39 properties to the new DIRECTV HD Platform and had 6,201 units in 27 properties that were work in process at June 30, 2008 that will be completed by the end of August 2008. Under a letter agreement with DIRECTV, DIRECTV is providing the Company with an additional monetary subsidy when it completes an upgrade of a current DIRECTV property (and any current HD subscribers) to the new DIRECTV HD Platform which is currently delivering 95 national HD channels with more expected in the remainder of 2008. Upgrading the Company's properties to the new HD Platform will remain a priority for the Company during the upcoming fiscal quarters so that the Company's services will not only be more competitive with franchised cable, but will generate additional revenue as customers subscribe to the wide array of HD and International Programming currently being offered by DIRECTV. The Company is committed to upgrading the vast majority of its priority properties by the end of its fiscal year.

Due mainly to a complete focus of the Company's financial and human resources on the upgrades to the HD Platform, the Company's organic growth has been secondary, and in that regard, the Company experienced a net subscriber reduction of 376 subscribers during the quarter, primarily the result of a significant number of seasonal disconnects (approximately 1,025) in the Company's Southeast Region that it acquired from Multiband last year. As of June 30, 2008, the Company reports 68,142 total billable subscribers, still a 26% increase over the total billable subscribers reported one year ago.

The combined affect of the Company's fiscal 2008 strategy should result in continued increases in revenues and EBITDA, lower subscriber acquisition costs, improved cash flow from operations, less capital expenditure cash utilization, continued push to upgrade its priority properties to the HD Platform and certain types of subscriber growth.

Use of Non-GAAP Financial Measures

The Company uses the common performance gauge of "EBITDA" (as adjusted by the Company) to evidence earnings exclusive of mainly noncash events, as is common in the technology, and particularly the cable and telecommunications, industries. EBITDA (as adjusted) is an important gauge because the Company, as well as investors who follow this industry frequently, use it as a measure of financial performance. The most comparable GAAP reference is simply the removal from net income or loss of - in the Company's case - interest, depreciation, amortization and noncash charges related to its shares, warrants and stock options. The Company adjusts EBITDA by then adding back any provision for bad debts and inventory reserves. EBITDA (as adjusted) is not, and should not be considered, an alternative to income from operations, net income, net cash provided by operating activities, or any other measure for determining our operating performance or liquidity, as determined under accounting principles generally accepted in the Unites States of America. EBITDA (as adjusted) also does not necessarily indicate whether our cash flow will be sufficient to fund working capital, capital expenditures or to react to changes in our industry or the economy generally. For the nine and three months ended June 30, 2008, the Company reports positive EBITDA (as adjusted) of $1,722,851 and $1,099,831, respectively. The following table reconciles the comparative EBITDA (as adjusted) of the Company to our consolidated net loss as computed under accounting principles generally accepted in the United States of America:

                                       For The Nine Months Ended       For The Three Months Ended
                                               June 30,                         June 30,
                                          2008            2007            2008             2007
EBITDA                               $    1,722,851   $    343,364   $     1,099,831   $     55,503
Interest Expense                         (1,331,673 )     (530,652 )        (475,788 )     (201,624 )
Deferred finance costs and debt
discount amortization (interest
expense)                                   (251,154 )     (130,127 )         (86,496 )      (49,245 )
Provision for doubtful accounts            (107,056 )     (176,094 )         (34,419 )            -
Depreciation and Amortization            (4,851,530 )   (3,775,221 )      (1,673,136 )   (1,272,056 )
Share-based compensation expense -
employees                                  (264,522 )     (631,581 )         (53,696 )     (194,741 )
Compensation expense for issuance
of common stock through employee
stock purchase plan                         (17,085 )      (18,526 )          (2,649 )       (1,496 )
Compensation expense for issuance
of common stock for employee
bonuses                                     (37,141 )      (37,240 )               -         (2,308 )
Compensation expense for issuance
of common stock for employee wages           (4,560 )      (33,945 )          (4,560 )            -
Compensation expense accrued to be
settled through the issuance of
common stock                                 (6,296 )            -            (6,296 )            -
Compensation expense through the
issuance of restricted common
stock for services rendered                 (60,522 )      (60,000 )         (20,572 )      (60,000 )
Share-based compensation expense -
nonemployees                                 (5,400 )      (63,125 )          (5,400 )            -
Net Loss                             $   (5,214,088 ) $ (5,113,147 ) $    (1,263,181 ) $ (1,725,967 )

Subscriber Activity

Due to the Company's aggressive schedule to upgrade all of its priority
properties prior to its fiscal year end and as a result of seasonal disconnects,
the Company had a reduction of 376 net subscribers during the quarter and
reports 68,142 total billable subscribers as of June 30, 2008. However, this was
still a 26% increase over total billable subscribers reported one year ago. The
Company's breakdown of total subscribers by type and kind is outlined in the
following chart:

                                            Subscribers       Subscribers       Subscribers       Subscribers       Subscribers
                                               as of             as of             as of             as of             as of
Service Type                               June 30, 2007    Sept. 30, 2007     Dec. 31, 2007     Mar. 31, 2008     June 30, 2008
Bulk DTH -DIRECTV                                  10,655            14,196            14,808            15,016            15,249
DTH -DIRECTV Choice/Exclusive                       8,161            10,034            10,650            11,269            11,547
Bulk Private Cable                                 17,870            20,912            20,564            20,084            20,179
Private Cable Choice or Exclusive                   1,376             2,684             3,211             3,369             2,270
Bulk BCA -DIRECTV                                   8,001             7,573             7,921             8,527             8,687
Bulk ISP                                            4,759             5,403             5,863             6,173             6,394
ISP Choice or Exclusive                             3,225             3,541             3,875             4,041             3,784
Voice                                                   -                 -                73                39                32
Total Subscribers                                  54,047            64,343            66,965            68,518            68,142

As of June 30, 2008, the Company had 27 properties and 9,892 units in work-in-progress ("WIP"). During the quarter, the Company completed work on 4,434 units that moved out of WIP and started construction on 809 units that entered WIP. Of the current WIP, 6,306 units (or 64%) are in new construction properties and 3,586 units (or 36%) are in existing conversion properties. The Company's breakdown of WIP units by type of service is as follows: (i) Bulk DTH 1,080; (ii) DTH Choice or Exclusive 5,584; (iii) Bulk BCA 859; (iv) Bulk Private Cable 0; (v) PC Choice/Exclusive 0; (vi) Bulk ISP 891; and (vii) ISP Choice/Exclusive 1,478. The Company defines its WIP as the number of units in properties where it has planned construction on a signed access agreement property, up through the conclusion of a billing phase in schedule, marketing campaign, or 120 days after property construction completion, whichever is later, at which time the property exits WIP. WIP is not reduced by the number of units turned billable in WIP properties during any given quarter.

The Company had 2,531 "under contract" subscribers in WIP at June 30, 2008 that the Company expects will become "billable" subscribers in the next few quarters. In many competitive properties, the Company is charging the property owner for installation of the satellite distribution system. Under contract is defined in actual potential subscribers, not as units being constructed. The under contract subscribers are an important component of the Company's subscriber base evaluation in that they represent the number of remaining "billable" subscribers the Company expects to realize from WIP. The Company breaks down and reports its under contract subscribers into new construction and existing conversion properties, due to the time differential that new construction properties remain in under contract. A breakdown of these "under contract" subscribers for new construction and existing conversion properties (already reduced to reflect property type and penetration rate) shows the following:

                                         Bulk          Exclusive      Competitive        Total
                                      Subscribers     Subscribers     Subscribers     Subscribers
New construction "under contract"
subscribers
as of June 30, 2008:                         1,519             163             624           2,306
Existing conversion "under
contract" subscribers
as of June 30, 2008:                             -              73             152             225
Total "under contract"
subscribers:                                 1,519             236             776           2,531

As mentioned previously, the Company is placing a heavy emphasis on upgrading its properties, and in particular its priority properties, to the new DIRECTV HD Platform in order to offer its subscribers the new DIRECTV HD programming packages that includes 95 national HD programming channels, local HD programming in 76 local markets (75% of all television households) and an array of new International Programming. Although there is a cost to these upgrades, the letter agreement entered into with DIRECTV in December of 2007 provides the Company a partial subsidy for upgrades in certain of these properties and other property owners are contributing to the cost of the upgrade. These upgrades are also resulting in renewals or extensions to existing access agreements and increased residuals from subscribers taking the advanced services programming. During the quarter ended June 30, 2008, the Company upgraded 7,317 units in 39 properties to the new DIRECTV HD Platform and had 6,201 units in 27 properties that were work in process at June 30, 2008 that will be completed this fiscal quarter. The Company anticipates that it will have upgraded over 20,000 units in 110 properties to the new DIRECTV HD Platform by the end of this fiscal year.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. Significant estimates are used for, but not limited to, revenue recognition with respect to a new subscriber activation subsidy, allowance for doubtful accounts, useful lives of property and equipment, fair value of equity instruments and valuation of deferred tax assets and long-lived assets. On an on-going basis, we evaluate our estimates. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances. Accordingly, actual results could differ from these estimates under different assumptions or conditions. During the nine months ended June 30, 2008, there were no material changes to accounting estimates or judgments.

RECENTLY ISSUED AND NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

In December 2007, the Financial Accounting Standards Board ("FASB") issued SFAS No.160, Noncontrolling Interests in Consolidated Financial Statements-an amendment to ARB No. 51 ("SFAS 160"). SFAS 160 establishes standards of accounting and reporting of noncontrolling interests in subsidiaries, currently known as minority interests, in consolidated financial statements, provides guidance on accounting for changes in the parent's ownership interest in a subsidiary and establishes standards of accounting of the deconsolidation of a subsidiary due to the loss of control. SFAS 160 requires an entity to present minority interests as a component of equity. Additionally, SFAS 160 requires an entity to present net income and consolidated comprehensive income attributable to the parent and the minority interest separately on the face of the consolidated financial statements. We are currently assessing the effect SFAS 160 may have, if any, on our consolidated financial position, results of operations or cash flows when adopted, as required, on October 1, 2009.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations ("SFAS 141R"). SFAS 141R requires the acquiring entity to recognize and measure at an acquisition date the fair value of all identifiable assets acquired, liabilities assumed and any noncontrolling interest in the acquiree. The statement recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase. SFAS 141R requires disclosures about the nature and financial effect of the business combination and also changes the accounting for certain income tax assets recorded in purchase accounting. We are currently assessing the effect SFAS 141R may have, if any, on our consolidated financial position, results of operations or cash flows when adopted, as required, on October 1, 2009.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurement ("SFAS 157"). SFAS 157 defines fair value and establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States of America. SFAS 157 also expands the disclosures related to the fair value measurements used to value assets and liabilities. SFAS 157 is effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. We do not expect the adoption of SFAS 157 to have any effect on our financial statements.

In September 2006, the Emerging Issues Task Force, or EITF, issued EITF No. 06-1, Accounting for Consideration Given by a Service Provider to a Manufacturer or Reseller of Equipment Necessary for an End-Customer to Receive Service from the Service Provider ("EITF No. 06-1"), which provides guidance to service providers regarding the proper reporting of consideration given to manufacturers or resellers of equipment necessary for an end-customer to receive its services. Depending on the circumstances, such consideration is reported as either an expense or a reduction of revenues. EITF No. 06-1 is effective for fiscal years beginning after June 15, 2007. The adoption of EITF No. 06-1 does not have an effect on our consolidated results of operations.

In February 2007, the FASB, issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment of FASB Statement No. 115 ("SFAS 159") which permits, but does not require, companies to report at fair value the majority of recognized financial assets, financial liabilities and firm commitments. Under this standard, unrealized gains and losses on items for which the fair value option is elected are reported in earnings at each subsequent reporting date. We are currently assessing the effect SFAS 159 may have, if any, on our consolidated financial position, results of operations or cash flows.

RESULTS OF OPERATIONS

The following discussion of results of operations and financial condition of the Company should be read in conjunction with the Company's Condensed Consolidated Financial Statements included elsewhere in this quarterly report on Form 10-Q.

NINE MONTHS ENDED JUNE 30, 2008 COMPARED TO NINE MONTHS ENDED JUNE 30, 2007

The following table sets forth for the nine months ended June 30, 2008 and 2007,
the percentages which selected items in the Statement of Operations bear to
total revenue and dollar and percentage changes between the periods:
. . .