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 - Six and Three Months Ended March 31, 2009 Compared to Six and Three Months Ended March 31, 2008

· Liquidity and Capital Resources - Six Months Ended March 31, 2009

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 potential 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 or the financial markets 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 23, 2008 for the period ending September 30, 2008.

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. The Company seeks to differentiate itself 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, the Company has 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, The Related Companies, as well as many others, to understand and meet the technology needs of these groups.

The Company derives revenue through the sale of digital and analog satellite television programming and high-speed Internet services to owners and residents of MDUs and negotiates long-term access agreements with the owners and managers of MDU properties allowing it 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, Direct Broadcast Satellite ("DBS") (also called Direct to Home ("DTH")) and Private Cable ("PC") programming. The DBS or DTH service uses a set-top digital receiver for residents to receive state-of-the-art digital satellite and local channel programming. For DBS, the Company exclusively offers DIRECTV® programming packages. From the DBS or DTH offerings the Company receives 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 connection to the property satellite network system, and (iv) occasional other marketing incentives from DIRECTV. Secondly, the Company offers a Private Cable video service where analog or digital satellite television 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. Net revenues from Private Cable result from the difference between the wholesale prices charged by programming providers and the price the Company charges subscribers for the private cable programming package. The Company provides the DBS, Private Cable and Internet services on an individual subscriber basis, but in many properties it provides 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 DIRECTV deployed properties or Bulk PC type subscribers in Private Cable deployed properties. From subscribers to the Internet service, the Company earns a monthly Internet access service fee. Again, in many properties, this service is provided in bulk and is referred to as Bulk ISP.

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

SUMMARY OF RESULTS AND RECENT EVENTS

Despite these economic times and the generally poor condition of the financial markets, MDU Communications delivered favorable results during the quarter ended March 31, 2009. During the quarter, the Company generated a 4% increase in revenue, a 59% increase in EBITDA (as adjusted), a 14% increase in average revenue per unit ("ARPU') and a 12% reduction in its Credit Facility principal. In addition, the Company completed or commenced HD Platform upgrades on 12,000 more units, completed the CSC Holdings transition and began the process of transferring data to a new and more robust subscriber management system.

As mentioned above, the Company's primary operational focus during the quarter ended March 31, 2009 was again the continued upgrade of its current properties and subscribers to the new DIRECTV HD Platform. During the quarter ended March 31, 2009, the Company upgraded 10,105 units in 43 properties to the new HD Platform and had 2,061 units in 10 properties that were work-in-process. Collectively, since the Company began its upgrade program, it has upgraded (or has upgrades in process at March 31, 2009) 265 properties containing 53,780 units and expects to have upgraded (or have upgrades in process) by June 30, 2009 approximately 375 properties containing 72,000 units. However, under a new letter agreement signed with DIRECTV on April 22, 2009, DIRECTV is providing the Company with an additional and increased upgrade subsidy through July 2009 for a specific list of properties totaling 24,886 units. This large upgrade undertaking by the Company (which was at the partial expense of organic growth) has resulted in a significant number of access agreement extensions and renewals, increased penetration rates, increased sale of advanced services and an increase in the Company's DIRECTV subscriber residual, all of which positively impact the Company's financial results and competitive status.

These property upgrades to the new DIRECTV HD Platform are essential as subscribers and property owners demand state-of-the-art technology and want access to DIRECTV's unparalleled comprehensive offering of HDTV programming and services. DIRECTV currently offers over 130 (moving to 150) HDTV national programming channels, has HDTV local programming in more than 94% of all U.S. markets, and a vast array of international and sports programming. The continued launch and advertising campaign for this new DIRECTV HDTV programming and associated services will continue to provide incremental revenue and improved penetration rates within Company properties.

As a secondary operational focus, the Company completed the series of closings and property and subscriber transitions with CSC Holdings. All funds have been received by the Company and all subscribers have been transferred. Collectively, the $8,330,000 in proceeds from the transactions has been used to reduce the Credit Facility.

From a financial perspective, the Company's revenue for the quarter ended March 31, 2009 increased 4% over the same period in fiscal 2008 to $5,838,312. This increase in revenue resulted in EBITDA (as adjusted and defined below) for the three months ended March 31, 2009 of $803,692, a 60% increase over the corresponding period in the previous fiscal year of $503,308.

The Company's ARPU at March 31, 2009 was $33.74, a 14% increase over the year ended September 30, 2008 of $29.55. 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) an increasing DIRECTV ARPU (the average revenue generated by a DIRECTV subscriber was up 3.5% in DIRECTV's fourth quarter to $90.46 per subscriber (as disclosed in DIRECTV's December 31, 2008 public filings)), (ii) the DIRECTV HD Platform upgrade subsidy paid to the Company, and (iii) a general increase in recurring revenue realized by the Company from the upgrade of properties to the new DIRECTV HD Platform and the associated services.

The Company planned for, and expected, slower subscriber growth during this fiscal quarter due to (i) its significant commitment to upgrade its current properties to the new DIRECTV HD Platform, (ii) its focus to convert its current properties from low margin private cable services to higher ARPU DIRECTV bulk services, (iii) a fiscal decision, dictated by these economic times, to conserve capital and improve its financial returns from previous capital investment in its portfolio of properties, instead of adding new subscribers, and (iv) the sale and transition of a certain number of subscribers to CSC Holdings. During the quarter ended March 31, 2009, the Company experienced a net subscriber increase of 516 subscribers. As of March 31, 2009, the Company reports 59,758 total billable subscribers, a 13% reduction from the total billable subscribers reported one year ago. The Company expects to increase its rate of subscriber growth later in fiscal 2009 as its HD Platform upgrade program approaches completion.

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                                  Mar. 31, 2008    June 30, 2008   Sept. 30, 2008    Dec. 31, 2008   Mar. 31, 2009
Bulk DTH -DIRECTV                                     15,016          15,249            15,382          12,478          12,925
DTH -DIRECTV Choice/Exclusive                         11,269          11,547            10,790          11,037          11,802
Bulk Private Cable                                    20,084          20,179            17,194          14,586          13,609
Private Cable Choice or Exclusive                      3,369           2,270             1,952           2,446           2,548
Bulk BCA -DIRECTV                                      8,527           8,687            10,337           9,505           9,549
Bulk ISP                                               6,173           6,394             5,911           5,215           5,215
ISP Choice or Exclusive                                4,041           3,784             3,956           3,952           4,083
Voice                                                     39              32                30              23              27
Total Subscribers                                     68,518          68,142            65,552          59,242          59,758

As of March 31, 2009, the Company had 16 properties and 6,085 units in work-in-process ("WIP"). During the quarter, the Company completed work on 1,354 units that moved out of WIP and started construction on 662 units that entered WIP. 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 1,447 "under contract" subscribers in WIP at March 31, 2009, that the Company expects will become "billable" subscribers in the next few quarters.

Regarding its Voice over Internet ("VoIP") service, the Company recently deployed this service to certain of its properties in a 'soft' launch, with a more expanded launch in the third and fourth fiscal quarters of 2009. To facilitate the bundling of its video, broadband and VoIP services, the Company is developing plans to 'bundle' its services onto a single billing platform. The Company is in discussions with DIRECTV for such billing integration.

The Company has maintained for some time now that it has been significantly undervalued by the market. As a result, the Company announced on December 24, 2008, that it has authorized the repurchase of shares of its common stock over a twelve month period in open market transactions, up to an aggregate value of $1.0 million. This authorization does not obligate the Company to acquire any particular amount of common stock, or at any particular price. The specific timing and amount of the repurchases will vary based on market conditions and other factors and the plan may be suspended, modified, extended or terminated by the Board of Directors at any time.

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 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 six months ended March 31, 2009 and 2008, the Company reports positive EBITDA (as adjusted) of $7,221,772 and $623,020, respectively. For the three months ended March 31, 2009 and 2008, the Company reports positive EBITDA (as adjusted) of $803,692 and $503,308, respectively. The following table reconciles the comparative EBITDA (as adjusted) of the Company to its consolidated income or net loss as computed under United States GAAP:

                                             For The Six Months Ended          For The Three Months Ended
                                                     March 31,                          March 31,
                                               2009             2008              2009              2008
EBITDA                                     $  7,221,772     $    623,020     $      803,692     $    503,308
Interest Expense                               (842,884 )       (855,885 )         (384,514 )       (447,184 )
Deferred finance costs and debt discount
amortization (interest expense)                (143,631 )       (164,658 )          (71,815 )        (86,495 )
Provision for doubtful accounts                 (85,888 )        (72,637 )          (60,696 )        (21,966 )
Depreciation and Amortization                (3,333,968 )     (3,178,394 )       (1,707,333 )     (1,623,249 )
Share-based compensation expense -
employees                                       (46,078 )       (210,826 )          (25,857 )        (66,999 )
Compensation expense for issuance of
common stock through employee stock
purchase plan                                   (28,098 )        (14,436 )          (27,135 )        (11,307 )
Compensation expense for issuance of
common stock for employee bonuses                (2,515 )        (37,141 )           (1,530 )        (37,141 )
Compensation expense for issuance of
common stock for employee wages                  (6,320 )              -               (680 )              -
Compensation expense accrued to be
settled through the issuance of common
stock                                            (2,504 )              -             (7,089 )         46,884
Compensation expense through the
issuance of restricted common stock for
services rendered                               (15,668 )        (39,950 )           (7,834 )        (26,450 )

Net Income (Loss)                          $  2,714,218     $ (3,950,907 )   $   (1,490,791 )   $ (1,770,599 )

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 six months ended March 31, 2009, there were no material changes to accounting estimates or judgments.

RECENTLY ISSUED AND NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

In May 2008, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles ("SFAS 162"). SFAS 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with GAAP for nongovernmental entities. SFAS 162 was effective November 15, 2008. The adoption of this pronouncement did not have a material impact on the Company's consolidated financial statements.

In April 2008, the FASB issued Staff Position No. FAS 142-3, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. The intent of this Staff Position is to improve the consistency between the useful life of a recognized intangible asset under Statement No. 142 and the period of expected cash flows used to measure the fair value of the asset under FASB Statement No.
141 (revised 2007), Business Combinations. This Staff Position shall be effective for financial statements issued for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. The Company is in the process of evaluating the effect of FAS No. 142-3 on its consolidated financial statements.

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 United States GAAP. SFAS 157 also expands the disclosures related to the fair value measurements used to value assets and liabilities. SFAS 157 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The adoption of SFAS 157 did not have any effect on the Company's financial statements.

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 SFAS 159, unrealized gains and losses on items for which the fair value option is elected are reported in earnings at each subsequent reporting date. SFAS 159 was effective for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The adoption of SFAS 159 did not have any effect on the Company's financial statements since the Company did not elect the fair value option for any of its assets or liabilities.

In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations ("SFAS 141(R)"). In SFAS 141(R), the FASB retained the fundamental requirements of Statement No. 141 to account for all business combinations using the acquisition method (formerly the purchase method) and for an acquiring entity to be identified in all business combinations. However, the new standard requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS 141(R) is effective for annual periods beginning on or after December 15, 2008. The Company is currently evaluating whether the adoption of SFAS 141(R) will have a material impact on its financial statements.

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.

SIX MONTHS ENDED MARCH 31, 2009 COMPARED TO SIX MONTHS ENDED MARCH 31, 2008

The following table sets forth for the six months ended March 31, 2009 and 2008,
the percentages which selected items in the Statement of Operations bear to
total revenue and dollar and percentage changes between the periods:

                                 Six Months                        Six Months                  Change          Change
                            Ended March 31, 2009              Ended March 31, 2008              ($)             (%)
REVENUE                 $    12,454,947           100 %   $    10,880,347           100 %   $  1,574,600             14 %
Direct costs                  5,044,279            40 %         4,926,097            45 %        118,182              2 %
Sales expenses                  570,126             4 %           651,995             6 %        (81,869 )          -13 %
Customer service and
operating expenses            3,005,380            24 %         2,866,779            27 %        138,601              5 %
General and
administrative
expenses                      1,840,533            15 %         2,172,853            20 %       (332,320 )          -15 %
Depreciation and
amortization                  3,333,968            27 %         3,178,394            29 %        155,574              5 %
(Gain) loss on sale
of customers and
related property and
equipment                    (5,038,839 )         -40 %            15,841             0 %     (5,054,680 )            -
OPERATING INCOME
(LOSS)                        3,699,500            30 %        (2,931,612 )         -27 %      6,631,112            226 %
Total other loss               (985,282 )          -8 %        (1,019,295 )          -9 %         34,013             -3 %
NET INCOME (LOSS)       $     2,714,218            22 %   $    (3,950,907 )         -36 %   $  6,665,125            169 %

Revenue. Revenue for the six months ended March 31, 2009 increased 14% to $12,454,947 compared to revenue of $10,880,347 for the six months ended March 31, 2008. The revenue increase is mainly attributable to (i) the installation revenue from the DIRECTV HD Platform upgrade subsidy occurring in fiscal 2009,
(ii) the continued conversion of subscribers from Private Cable to DTH services, and (iii) a higher percentage of customers subscribing to advanced services. The Company expects total revenue to continue to increase throughout fiscal 2009. Our six months revenue (inclusive of the DIRECTV HD upgrade subsidy) has been derived from the following sources:

. . .