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 - Nine and Three Months Ended June 30, 2009 Compared to Nine and Three Months Ended June 30, 2008

· Liquidity and Capital Resources - Nine Months Ended June 30, 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

The Company continued its trend of upward growth in its third fiscal quarter as it wound down the satellite system upgrade effort in its current properties to the new DIRECTV HD Platform. Revenue for the nine months was up 6% over the prior year period and EBITDA (as adjusted) was up 362% over the prior year period, due mainly to the gain on sale of assets to CSC Holdings. The Company's average revenue per unit ("ARPU") was up 11% over fiscal 2008.

The Company's primary operational focus during the quarter ended June 30, 2009, and for the eighteen months prior, was the upgrade of its current properties and subscribers to the new DIRECTV HD Platform. During the quarter ended June 30, 2009, the Company upgraded another 6,154 units in 29 properties to the new HD Platform and had 7,227 units in 42 properties that were work-in-process. Collectively, since the Company began its upgrade program, it has upgraded (or has upgrades in process at July 30, 2009) 367 properties containing 72,263 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 have positively impacted the Company's financial results and competitive status. The continued launch and advertising campaign from the new DIRECTV HDTV programming and associated services will continue to provide incremental revenue and improved penetration rates within Company properties.

The Company's ARPU at June 30, 2009 was $32.89, an 11% 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, (ii) the DIRECTV HD Platform upgrade subsidy paid to the Company, and (iii) a general increase in recurring revenue (and increasing penetration rates) realized by the Company from the upgrade of properties to the new DIRECTV HD Platform and the purchasing of advanced and associated services by subscribers.

With resources and capital being freed up from the expansive property DIRECTV HD Platform upgrade program, the Company began planning for increased organic and acquisition growth. During the quarter ended June 30, 2009, the Company experienced a subscriber increase of 3,050, however, that number was reduced by 870 subscribers for seasonal disconnects typical for this time of year, for a net subscriber total of 2,180 subscribers. As of June 30, 2009, the Company reports 61,938 total billable subscribers, a 9% reduction from the total billable subscribers reported one year ago, due to the previous sale of subscribers to CSC Holdings. The Company is planning a three-fold approach to growth, (i) acquisition of system operators severely constrained by the credit crisis, (ii) organic growth through new right of entry opportunities, and (iii) increased penetration rates from the significant Company investment in its currently deployed properties for the DIRECTV HD Platform upgrades. With growth in mind, on June 30, 2009, the Company executed an agreement to acquire 3,938 subscribers and related assets from New York based Rocket Broadband Networks, Inc. These subscribers are located in 31 multi-family properties, which represent over 9,100 total units passed by wire. Concurrent with the signing of the agreement, the Company closed on the initial purchase of 2,512 subscribers located in 18 properties. On July 30, 2009, the Company completed a second round closing of 7 more properties for which consents to assignment were received. The Company expects to close the remainder of the properties by the end of August upon obtaining certain other consents. In addition, the Company is in engaged in acquisition-related discussions with approximately six other operators as part of the Company's new acquisition strategy. Regarding new sales opportunities, the Company has hired two new sales directors and two new account executives, all of whom have significant sales experience. Regarding growth in currently deployed properties, the Company has assembled teams of direct sales representatives to assist its own employees in creating additional demand in the newly upgraded DIRECTV HD Platform properties. The Company has increased its direct mail offerings and is launching its new eNewsletter targeting multi-family property owners, managers and developers. The Company is experiencing a lift in penetration rates and hopes to continue to capitalize on its HD upgrade investment.

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, 2008      Sept. 30, 2008       Dec. 31, 2008       Mar. 31, 2009       June 30, 2009
Bulk DTH -DIRECTV                                 15,249              15,382              12,478              12,925              13,058
DTH -DIRECTV Choice/Exclusive                     11,547              10,790              11,037              11,802              11,920
Bulk Private Cable                                20,179              17,194              14,586              13,609              13,986
Private Cable Choice/ Exclusive                    2,270               1,952               2,446               2,548               3,400
Bulk BCA -DIRECTV                                  8,687              10,337               9,505               9,549               9,925
Bulk ISP                                           6,394               5,911               5,215               5,215               5,315
ISP Choice or Exclusive                            3,784               3,956               3,952               4,083               4,302
Voice                                                 32                  30                  23                  27                  32
Total Subscribers                                 68,142              65,552              59,242              59,758              61,938

As of June 30, 2009, the Company had 12 properties and 2,940 units in work-in-process ("WIP"). During the quarter, the Company completed work on 3,374 units that moved out of WIP and started construction on 229 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 1,140 "under contract" subscribers in WIP at June 30, 2009 that the Company expects will become "billable" subscribers in the next few quarters.

The Company continues to repurchase shares of its common stock pursuant to the stock repurchase plan that was announced on December 24, 2008. This plan authorizes the repurchase of Company shares of common stock over a twelve month period in open market transactions, up to an aggregate value of $1.0 million. To date, the Company has repurchased 174,423 of its shares of common stock. 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 United 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 months ended June 30, 2009 and 2008, the Company reports positive EBITDA (as adjusted) of $7,964,305 and $1,722,851, respectively. For the three months ended June 30, 2009 and 2008, the Company reports positive EBITDA (as adjusted) of $742,533 and $1,099,831, respectively. The following table reconciles the comparative EBITDA (as adjusted) of the Company to its consolidated net income or net loss as computed under United States GAAP:

                                             For The Nine Months Ended          For The Three Months Ended
                                                      June 30,                           June 30,
                                               2009              2008              2009              2008
EBITDA                                     $   7,964,305     $  1,722,851     $      742,533     $  1,099,831
Interest Expense                              (1,214,541 )     (1,331,673 )         (371,657 )       (475,788 )
Deferred financing costs and debt
discount amortization (interest expense)        (215,445 )       (251,154 )          (71,814 )        (86,496 )
Provision for doubtful accounts                  (89,212 )       (107,056 )           (3,324 )        (34,419 )
Depreciation and Amortization                 (5,062,042 )     (4,851,530 )       (1,728,074 )     (1,673,136 )
Share-based compensation expense -
employees                                        (70,060 )       (264,522 )          (23,982 )        (53,696 )
Compensation expense for issuance of
common stock through employee stock
purchase plan                                    (28,098 )        (17,085 )                -           (2,649 )
Compensation expense for issuance of
common stock for employee bonuses                 (1,530 )        (37,141 )                -                -
Compensation expense for issuance of
common stock for employee wages                   (2,720 )         (4,560 )                -           (4,560 )
Compensation expense accrued to be
settled through the issuance of common
stock                                            (23,695 )         (6,296 )          (16,606 )         (6,296 )
Compensation expense through the
issuance of restricted common stock for
services rendered                                (39,530 )        (60,522 )          (23,862 )        (20,572 )
Share-based compensation expense -
nonemployees                                           -           (5,400 )                -           (5,400 )
Net Income (Loss)                          $   1,217,432     $ (5,214,088 )   $   (1,496,786 )   $ (1,263,181 )

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, 2009, there were no material changes to accounting estimates or judgments.

RECENTLY ISSUED AND NOT YET EFFECTIVE ACCOUNTING PRONOUNCEMENTS

In May 2009, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 165, Subsequent Events ("SFAS 165"). SFAS 165 is intended to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. It requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date-that is, whether that date represents the date the financial statements were issued or were available to be issued. This disclosure should alert all users of financial statements that an entity has not evaluated subsequent events after that date in the set of financial statements being presented. SFAS 165 is effective for interim and annual periods ending after June 15, 2009. The adoption of this pronouncement did not have a material impact on the Company's consolidated financial statements.

In April 2009, the FASB issued Staff Position No. FAS 157-4, which amends the factors considered in determining the fair value of assets and liabilities under FASB Statement No. 157, Fair Value Measurement. The intent of this Staff Position is to address concerns that SFAS No. 157 did not provide sufficient guidance on how to measure fair value when markets for financial assets that were previously active are no longer active. This Staff Position is effective for interim and annual periods ending after June 15, 2009. The adoption of this pronouncement did not have a material impact on the Company's consolidated financial statements.

In May 2008, the FASB issued 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 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.

NINE MONTHS ENDED JUNE 30, 2009 COMPARED TO NINE MONTHS ENDED JUNE 30, 2008

The following table sets forth for the nine months ended June 30, 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:

                                 Nine Months                       Nine Months                 Change          Change
                             Ended June 30, 2009               Ended June 30, 2008              ($)             (%)
REVENUE                 $    18,239,725           100 %   $    17,138,127           100 %   $  1,101,598              6 %
Direct costs                  7,470,045            41 %         7,468,119            44 %          1,926              0 %
Sales expenses                  978,941             5 %           955,890             6 %         23,051              2 %
Customer service and
operating expenses            4,381,923            24 %         4,386,747            25 %         (4,824 )            0 %
General and
administrative
expenses                      2,750,201            15 %         3,108,498            18 %       (358,297 )          -12 %
Depreciation and
amortization                  5,062,042            28 %         4,851,530            28 %        210,512              4 %
Gain on sale of
customers and related
property and
equipment                    (5,049,473 )         -28 %                 -             0 %     (5,049,473 )            -
. . .