<PAGE>   1
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                      ------------------------------------

                                    FORM 10-Q


[x]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarterly period ended June 30, 1997

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from _______________ to__________________.

         Commission file number 0-28968


                         MDSI MOBILE DATA SOLUTIONS INC.
             (Exact name of registrant as specified in its charter)


              CANADA                                NOT APPLICABLE
  (Jurisdiction of incorporation)          (I.R.S. Employer Identification No.)


                        SUITE 135 - 10551 SHELLBRIDGE WAY
                           RICHMOND, BRITISH COLUMBIA,
                                 CANADA V6X 2W9
                                 (604) 270-9939

   (Address and telephone number of registrant's principal executive offices)


         Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes X   No  
                                                  

              The number of outstanding shares of the registrant's
          common stock, no par value, at June 30, 1997 was 6,030,618.



================================================================================




<PAGE>   2

                         MDSI MOBILE DATA SOLUTIONS INC.

                             INDEX TO THE FORM 10-Q
                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997


<TABLE>
<CAPTION>
                                                                                                        PAGE
PART I - FINANCIAL INFORMATION
<S>                 <C>                                                                                 <C>
         ITEM 1.    FINANCIAL STATEMENTS

                    Condensed Consolidated Balance Sheets .............................................. 3

                    Condensed Consolidated Statements of Operations
                    and Retained Earnings (Deficit)  ................................................... 4

                    Condensed Consolidated Statements of Cash Flows .................................... 5

                    Notes to the Condensed Consolidated Financial Statements ........................... 6

         ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND  RESULTS OF OPERATIONS ............................................... 8


PART II - OTHER INFORMATION

         ITEM 1.    LEGAL PROCEEDINGS  ................................................................ 17

         ITEM 2.    CHANGES IN SECURITIES ............................................................. 17

         ITEM 3.    DEFAULTS UPON SENIOR SECURITIES ................................................... 17

         ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................ 17

         ITEM 5.    OTHER INFORMATION...................................................................18

         ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K................................................... 18


SIGNATURES          ................................................................................... 19

EXHIBIT INDEX       ....................................................................................20
</TABLE>












                                      -2-


<PAGE>   3


PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS


                         MDSI MOBILE DATA SOLUTIONS INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                         (EXPRESSED IN CANADIAN DOLLARS)

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                             AS AT
                                                 ------------------------------
                                                   JUNE 30,        DECEMBER 31,
ASSETS                                               1997               1996
                                                 ------------      ------------
<S>                                              <C>               <C>       
CURRENT ASSETS

    Cash and cash equivalents ..............     $ 11,979,961      $ 20,207,019
    Accounts receivable, net
       Trade ...............................       13,242,297        15,264,175
       Unbilled ............................       10,370,783         2,811,561
    Work in progress .......................        4,732,071         1,515,099
    Prepaid expenses .......................          607,201           148,597
    Deferred income taxes ..................        1,885,528           149,767
                                                 ------------      ------------
                                                   42,817,841        40,096,218


CAPITAL ASSETS, NET ........................        3,503,311         1,958,758
INTANGIBLE ASSETS, NET .....................        6,926,005         3,516,782
                                                 ------------      ------------
TOTAL ASSETS ...............................     $ 53,247,157      $ 45,571,758
                                                 ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts payable .......................     $  8,703,270      $ 10,704,035
    Accrued liabilities ....................        7,998,501         1,167,952
    Deferred revenue .......................        5,722,438         5,970,161
    Notes payable ..........................             --             428,424
    Current portion of long term debt ......        2,937,013           391,000
    Current obligations under capital leases           52,514            54,767
                                                 ------------      ------------
                                                   25,413,736        18,716,339

LONG-TERM DEBT .............................          296,324              --
OBLIGATIONS UNDER CAPITAL LEASES ...........             --              19,710
                                                 ------------      ------------
TOTAL LIABILITIES ..........................       25,710,060        18,736,049
                                                 ------------      ------------
STOCKHOLDERS' EQUITY
    Common stock ...........................       42,032,949        30,681,176
    Special warrants .......................          403,112         3,925,100
    Treasury stock .........................         (122,743)         (122,743)
    Retained earnings (deficit) ............      (14,776,221)       (7,647,824)
                                                 ------------      ------------
                                                   27,537,097        26,835,709
                                                 ------------      ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY..     $ 53,247,157      $ 45,571,758
                                                 ============      ============
</TABLE>






            See notes to condensed consolidated financial statements



                                      -3-
<PAGE>   4

                         MDSI MOBILE DATA SOLUTIONS INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                         AND RETAINED EARNINGS (DEFICIT)
                         (Expressed in Canadian dollars)

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                          JUNE 30,                           JUNE 30,
                                               ------------------------------      ------------------------------
                                                   1997              1996              1997              1996
                                               ------------      ------------      ------------      ------------
<S>                                            <C>               <C>               <C>               <C>         
REVENUE

     Software and services ...............     $ 11,157,235      $  3,862,483      $ 18,274,749      $  6,508,776
     Terminals and infrastructure ........        4,653,917                --         6,519,318                --
     Third party products and services ...        1,993,667           499,873        10,205,900           724,366
     Maintenance and support .............          659,408           527,613         1,496,625         1,177,866
                                               ------------      ------------      ------------      ------------
                                                 18,464,227         4,889,969        36,496,592         8,411,008



DIRECT COSTS .............................        9,446,115         1,845,528        20,897,756         3,432,635
                                               ------------      ------------      ------------      ------------
GROSS PROFIT .............................        9,018,112         3,044,441        15,598,836         4,978,373
                                               ------------      ------------      ------------      ------------
OPERATING EXPENSES

     Research and development ............        1,842,652           709,554         3,242,378         1,508,037
     Sales and marketing .................        2,896,190         1,053,551         5,021,402         2,044,763
     General and administrative ..........        1,645,524           606,998         2,804,393         1,058,061
     Amortization of intangible assets ...          216,197            43,975           360,961            43,975
     Acquired research and development ...       10,002,982         8,523,363        10,002,982         8,523,363
                                               ------------      ------------      ------------      ------------
                                                 16,603,545        10,937,441        21,432,116        13,178,199
                                               ------------      ------------      ------------      ------------
OPERATING INCOME (LOSS) ..................       (7,585,433)       (7,893,000)       (5,833,280)       (8,199,826)
OTHER INCOME (EXPENSE) ...................           18,977           (63,258)          133,552            20,569
                                               ------------      ------------      ------------      ------------
INCOME (LOSS) BEFORE TAX PROVISION .......       (7,566,456)       (7,956,258)       (5,699,728)       (8,179,257)


PROVISION FOR INCOME TAXES ...............         (825,221)         (218,080)       (1,428,669)         (118,481)
                                               ------------      ------------      ------------      ------------
NET INCOME (LOSS) FOR THE PERIOD .........       (8,391,677)       (8,174,338)       (7,128,397)       (8,297,738)


RETAINED EARNINGS (DEFICIT), BEGINNING OF

PERIOD ...................................       (6,384,544)       (1,757,095)       (7,647,824)       (1,633,695)
                                               ------------      ------------      ------------      ------------

RETAINED EARNINGS (DEFICIT), END OF PERIOD     $(14,776,221)     $ (9,931,433)     $(14,776,221)     $ (9,931,433)
                                               ============      ============      ============      ============


PRIMARY EARNINGS (LOSS) PER COMMON SHARE .     $      (1.26)     $      (1.60)     $      (1.10)     $      (1.62)
                                               ============      ============      ============      ============

WEIGHTED AVERAGE SHARES OUTSTANDING ......        6,668,908         5,116,527         6,490,361         5,116,527
                                               ============      ============      ============      ============
</TABLE>



            See notes to condensed consolidated financial statements

                                       -4-



<PAGE>   5

                         MDSI MOBILE DATA SOLUTIONS INC.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                         (EXPRESSED IN CANADIAN DOLLARS)

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                        SIX MONTHS ENDED
                                                                             JUNE 30,
                                                                  ------------------------------
                                                                      1997               1996
                                                                  ------------      ------------
<S>                                                               <C>               <C>          
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss) for the period ........................     $ (7,128,397)     $ (8,297,738)
    Items not affecting cash:
          Depreciation and amortization .....................          884,054           290,185
          Deferred income taxes .............................          665,530           (20,538)
          Acquired research development .....................       10,002,982         8,523,363
          Changes in non-cash operating working capital items       (9,691,389)       (1,726,281)  
                                                                  ------------      ------------
   Net cash used in operating activities
                                                                    (5,267,220)       (1,231,009)
                                                                  ------------      ------------

CASH FLOWS FROM FINANCING ACTIVITIES

    Issuance of common stock ................................          901,707            83,541
    Repayment of long-term debt .............................         (573,545)         (201,595)
    Repayment of loan notes .................................         (428,424)             --
    Proceeds from special warrants ..........................             --           1,845,570
    Repayment of capital leases .............................          (21,963)          (23,605) 
                                                                  ------------      ------------

    Net cash provided by (used in) financing activities .....         (122,225)        1,703,911
                                                                  ------------      ------------

CASH FLOWS FROM INVESTING ACTIVITIES

    Acquisition of MDSI UK ..................................             --          (1,089,973)  
    Acquisition of Alliance .................................       (1,892,426)             --
    Acquisition of capital assets ...........................         (945,187)         (457,722) 
                                                                  ------------      ------------

    Net cash used in investing activities ...................       (2,837,613)       (1,547,695)
                                                                  ------------      ------------

NET CASH OUTFLOW ............................................       (8,227,058)       (1,074,793)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD ..............       20,207,019         1,921,799
                                                                  ------------      ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD ....................     $ 11,979,961      $    847,006
                                                                  ============      ============
</TABLE>


SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES


During the six months ended June 30, 1997, the Company issued 252,000 common
shares and 252,000 common share purchase warrants on the exercise of 252,000
special warrants without additional consideration. Also, during the six months
ended June 30, 1997, the Company acquired all of the issued and outstanding
shares of Alliance Systems, Incorporated ("Alliance") for $9,116,828.
Consideration consisted of 347,750 common shares of the Company and payments of
$2,188,750, including cash of $1,892,426 (US$1,367,869) and unsecured notes in
the principal amount of $296,324 (US$214,219).

During the six months ended June 30, 1996, the Company acquired all of the
issued and outstanding shares of MDSI Mobile Data Solutions (UK) Ltd. ("MDSI
UK") for $10,616,023. Consideration consisted of cash payments of $1,089,973 and
convertible notes in the amount of $9,526,050



            See notes to condensed consolidated financial statements

                                      -5-

<PAGE>   6

                         MDSI MOBILE DATA SOLUTIONS INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                     FOR THE SIX MONTHS ENDED JUNE 30, 1997
                         (EXPRESSED IN CANADIAN DOLLARS)
                                   (UNAUDITED)

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     (a)  Basis of presentation

          These financial statements have been prepared in accordance with
          accounting principles generally accepted in the United States for
          interim financial reporting and pursuant to the instructions of the
          United States Securities and Exchange Commission Form 10-Q and Article
          10 of Regulation S-X. While these financial statements reflect all
          normal recurring adjustments which are, in the opinion of management,
          necessary for fair presentation of the results of the interim period,
          they do not include all of the information and footnotes required by
          generally accepted accounting principles for complete financial
          statements. For further information, refer to the financial statements
          and footnotes thereto included in the Company's Annual Report filed on
          Form 10-K for the year ended December 31, 1996.

     (b)  Use of estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States requires management
          to make estimates and assumptions that affect the reported amounts of
          assets and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting
          periods. Actual results could differ from those estimates.

     (c)  Recent pronouncements

          In February 1997, the Financial Accounting Standards Board issued
          Statement No. 128, Earnings per Share (SFAS 128), which established
          new standards for computing and presenting earnings per share. With
          SFAS 128, Primary earnings per share will be replaced by Basic
          earnings per share which is computed by dividing income available to
          common stockholders by the weighted average number of shares
          outstanding for the period. In addition, SFAS 128 also requires dual
          presentation of Basic and Diluted earnings per share on the face of
          the income statement with a reconciliation of the numerator and
          denominator of the Basic earnings per share to that of the Diluted
          earnings per share. SFAS 128 will be effective for fiscal and interim
          periods ending after December 15, 1997. If SFAS 128 had been adopted
          during the three months ended June 30, 1997 and 1996, Basic earnings
          (loss) per share would have been $(1.34) and $(2.05), respectively. If
          SFAS 128 had been adopted during the six months ended June 30, 1997
          and 1996, Basic earnings (loss) per share would have been ($1.17) and
          $(2.08), respectively. Diluted earnings per share would not have been
          significantly different than Primary earnings (loss) per common share
          as reported in these financial statements.

2.   ACQUISITION OF ALLIANCE SYSTEMS, INCORPORATED

     On April 17, 1997, the Company entered into an agreement to acquire all of
     the issued and outstanding shares of Alliance Systems, Incorporated
     ("Alliance") for $9,116,828, consisting of 347,750 common shares and
     US$1,582,088 ($2,188,750) including cash of US$1,367,869 ($1,892,426) and
     US$214,219 ($296,324) of unsecured notes which bear interest at 6.07% and
     mature on January 1, 1999. The acquisition was completed July 1, 1997 and
     the common shares were issued at that date. Those common shares are
     reflected as issued in these financial statements. Alliance, based out of
     Itasca, Illinois, is a supplier of mobile workforce management solutions to
     the utility, public safety and cable market sectors. This transaction has
     been accounted for using the purchase method and the purchase price has
     been allocated to the estimated fair value of net assets acquired as
     follows:






                                      -6-

<PAGE>   7

     Estimated fair value of net assets acquired:

<TABLE>
           <S>                                                                 <C>        
           Current assets ..........................................            $ 1,737,363
           Capital assets ..........................................              1,117,328
           Deferred income taxes ...................................              2,401,290
           Other assets ............................................                 27,287
                                                                                -----------
                                                                                  5,283,268
                                                                                -----------
           Current liabilities .....................................              6,833,045
           Long-term debt ..........................................              3,111,690
                                                                                -----------
                                                                                  9,944,735
                                                                                -----------
           Acquired research and development .......................             10,002,982
           Goodwill ................................................              3,775,313
                                                                                -----------
                                                                                $ 9,116,828
                                                                                ===========
</TABLE>



The results of operations of Alliance have been consolidated from April 17,
1997. The following pro forma information presents the results of operations of
the Company as if the MDSI UK and Alliance acquisitions were combined at the
beginning of the respective periods presented:


<TABLE>
<CAPTION>
                                                                     Six months ended
                                                                          June 30,
                                                              -------------------------------
                                                                  1997               1996
                                                              ------------       ------------
              <S>                                             <C>                <C>         
              Revenue .................................       $ 37,693,685       $ 25,978,827
                                                              ============       ============
              Net income (loss) .......................       $  1,541,681       $   (228,402)
                                                              ============       ============
              Earnings (loss) per common share ........       $       0.24       $      (0.04)
                                                              ============       ============
</TABLE>


3.   SUBSEQUENT EVENTS

     Subsequent to June 30, 1997, the Company:

     a)   issued 28,000 common shares and 28,000 common share purchase warrants
          on the exercise of 28,000 special warrants; and

     b)   repaid certain debt related to the Alliance acquisition in the amount
          of US$1,902,144.










                                      -7-

<PAGE>   8

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         Certain statements and information contained in this Report constitute
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual results,
performance or achievement of the Company, or developments in the Company's
industry, to differ materially from the anticipated results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, but are not limited to: the Company's limited operating
history, lengthy sales cycles, the Company's dependence upon large contracts and
relative concentration of customers, risks involving the management of growth
and integration of acquisitions, competition, product development risks and
risks of technological change, dependence on selected vertical markets and
third-party marketing relationships and suppliers, the Company's ability to
protect its intellectual property rights and the other risks and uncertainties
detailed in the Company's Securities and Exchange Commission filings, including
the Company's Annual Report on Form 10-K for the year ended December 31, 1996.

         All financial information in this report is expressed in Canadian
dollars unless otherwise noted.

OVERVIEW

         The Company develops, markets, implements and supports mobile workforce
management and wireless connectivity software and related network and mobile
computing equipment for use by a wide variety of companies that have substantial
mobile workforces, such as utility, telecommunications and cable companies, taxi
services, courier companies and public safety and roadside recovery
organizations. The Company's products are used by such companies in conjunction
with public and private wireless data communications networks to provide
comprehensive solutions for the automation of business processes associated with
the scheduling, dispatching and management of a mobile workforce. The Company's
products provide a cost-effective method for companies with mobile workers to
utilize data communications to communicate with such workers, and for such
workers to interface on a real-time basis with their corporate information
systems.

         The Company's revenue is derived from (i) software and services,
consisting of the licensing of software and provision of related services,
including project management, installation, integration, customization and
training; (ii) terminal and infrastructure equipment consisting of the sale of
mobile computing devices, related in-vehicle equipment and wireless data network
equipment manufactured by the Company; (iii) third party products and services,
consisting of the provision of non-MDSI products and services as part of the
total contract; and (iv) maintenance and support, consisting of the provision of
after-sale support services as well as hourly, annual or extended maintenance
contracts.

         The implementation of a complete mobile data solution requires a
wireless data communications network, a land-based data communications network,
mobile computing devices integrated with wireless data communication modems,
host computer equipment, industry specific application software, wireless
connectivity software and a variety of services to manage and install these
components, integrate them with an organization's existing computer systems, and
configure or customize the software to meet customer requirements. Frequently,
in the Company's larger contracts only a limited number of the mobile computing
devices and in-vehicle equipment are installed initially, with the balance
implemented over a rollout period that may extend up to one year or more. Where
increases in mobile work forces require, or where additional departments of
mobile workers are added, additional mobile computing devices may be installed.

         Revenue for software and services has historically accounted for a
substantial portion of the Company's revenue. Typically, the Company enters into
a fixed price contract with a customer for the licensing of selected software
products and the provision of specific services that are generally performed
within six to twelve










                                      -8-

<PAGE>   9

months. Pricing for these contracts includes license fees as well as a fee for
professional services. The Company generally recognizes total revenue for
software and services associated with a contract using a percentage of
completion method based on the total costs incurred over the total estimated
costs to complete the contract.

         Commencing in the third quarter of 1996, the Company began generating
revenue from the sale of mobile computing devices and infrastructure equipment
as a result of the acquisition of MDSI Mobile Data Solutions (UK) Ltd. ("MDSI
UK" - formerly Spectronics Micro Systems Limited) of Cambridge, England on June
28, 1996. The Company's contracts with customers in the taxi, courier and
roadside recovery markets generally require the Company to provide mobile
computing devices and wireless data communications network equipment. Revenue
for these products is recognized at the time of transfer of title.

         The Company's customers typically enter into ongoing maintenance
agreements that provide for maintenance, product enhancement and technical
support services for a period commencing after expiration of the initial
warranty period. Maintenance agreements typically have a term of twelve months
and are invoiced either annually or monthly. Revenue for these services is
recognized ratably over the term of the contract.

         Prior to 1996, the Company typically supplied only the MDSI application
and wireless connectivity software and related services as part of its contract
with a customer. The portion of contracts requiring the supply of third party
products and services was not material and was not separated for revenue
purposes. Beginning in 1996, however, the Company was called on to provide, in
addition to MDSI products and services, certain third party products, such as
host computer hardware and operating system software, mobile computing devices
and radio data network infrastructure equipment, or sub-contract services, such
as radio data system design and implementation. The Company recognizes revenue
for the supply of third party hardware upon transfer of title to the customer.
The Company recognizes revenue for the supply of third party services using a
percentage of completion method based on the costs incurred over the total
estimated cost to complete the third party services contract.

         The Company believes that it will often supply some portion of third
party products and services to customers where it is successful in selling its
own products and services. There can be no assurance, however, that any
contracts entered into by the Company to supply third party software and
products in the future will represent a substantial portion of revenue in any
future period. Since the revenue generated from the supply of third party
products and services may represent a significant portion of certain contracts
and the installation and rollout of third party products is generally at the
discretion of the customer, the Company may, depending on the level of third
party products and services provided during a period, experience large quarterly
fluctuations in revenue.

         Prior to 1996, the Company achieved a gross margin of 60-70% on its
consolidated revenue. The gross margins achieved on revenue from MDSI UK during
the three years prior to the MDSI UK acquisition ranged from 62.6% to 21.2%.
Since the commencement of sales of third party products and services in 1996,
the Company has achieved gross margins of approximately 20.0% on revenues
attributable to such products and services. As a result of the foregoing
factors, the Company expects that its consolidated gross margins in future
periods will be lower than those achieved prior to the MDSI UK acquisition and
that changes in the mix of these revenues in any period will result in
significant fluctuations in direct costs, gross profits, operating results and
other items expressed as a percentage of revenue.

         The Company's revenue is dependent, in large part, on significant
contracts from a limited number of customers. As a result, any substantial delay
in the Company's completion of a contract, delays due to and difficulties
associated with the introduction of new products, the inability of the Company
to obtain new contracts or the cancellation of an existing contract by a
customer could have a material adverse effect on the Company's results of
operations and financial condition. The Company's contracts are generally
cancelable upon notice by the customer. The loss of certain contracts could have
a material adverse effect on the Company's business, operating results and
financial condition. As a result of these and other factors, the Company's
results of operations have fluctuated in the past and may continue to fluctuate
from period-to-period.





                                      -9-

<PAGE>   10

EFFECTS OF ACQUISITIONS

These condensed consolidated financial statements of the Company reflect the
acquisitions of Alliance Systems, Incorporated ("Alliance") effective April 17,
1997 and MDSI UK on June 28, 1996. These acquisitions have been accounted for
using the purchase method.

The Company acquired MDSI UK on June 28, 1996. MDSI UK develops, markets,
implements and supports mobile workforce management application software,
wireless connectivity software, wireless data network equipment, mobile
computing devices and related in-vehicle equipment used by customers principally
in the taxi, courier and roadside recovery markets. The acquisition resulted in
the write-off of $8.5 million associated with acquired research and development.
As the acquisition was completed at the end of the second quarter in 1996, the
Company's results of operations for the three months ended June 30, 1996 and the
six months ended June 30, 1996 do not include the results of operations of MDSI
UK.

On April 17, 1997, the Company entered into an agreement to acquire Alliance
which was completed July 1, 1997. Alliance is a supplier of mobile workforce
management solutions to the utility, public safety and cable markets. The
acquisition resulted in the write-off of $10.0 million associated with acquired
research and development. The Company's results of operations for the three
months ended June 30, 1997 and the six months ended June 30, 1997 include only
the results of operations of Alliance from April 17, 1997.

The Company has a limited history of operations on a combined basis with
Alliance and MDSI UK. In addition, since the acquisition of Alliance and MDSI
UK, the Company has restructured certain aspects of those operations. As a
result, the financial information presented in this Report is not indicative of
the results that would have been obtained had the acquisitions occurred prior to
the commencement of the periods covered herein, and such information should not
be relied upon as an indication of future performance.











                                      -10-


<PAGE>   11

RESULTS OF OPERATIONS

           The following table sets forth, for the periods indicated, certain
components of the selected financial data of the Company as a percentage of
total revenue:


<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED JUNE 30,        SIX MONTHS ENDED JUNE 30,
                                             -------------------------         -------------------------
                                               1997             1996             1997              1996
                                             --------         --------         --------         --------
<S>                                              <C>              <C>              <C>              <C>  
REVENUE

   Software and services ...........             60.4%            79.0%            50.1%            77.4%
   Terminals and infrastructure ....             25.2           --                 17.9           --
   Third party products and services             10.8             10.2             28.0              8.6
   Maintenance and support .........              3.6             10.8              4.0             14.0
                                             --------         --------         --------         --------
                                                100.0            100.0            100.0            100.0


DIRECT COSTS .......................             51.2             37.7             57.3             40.8
                                             --------         --------         --------         --------
GROSS PROFIT .......................             48.8             62.3             42.7             59.2
                                             --------         --------         --------         --------
OPERATING EXPENSES
   Research and development ........             10.0             14.5              8.9             17.9
   Sales and marketing .............             15.7             21.6             13.8             24.3
   General and administrative ......              8.9             12.4              7.7             12.6
   Amortization of intangible assets              1.2              0.9              1.0              0.5
   Acquired research and development             54.1            174.3             27.4            101.3
                                             --------         --------         --------         --------
                                                 89.9            223.7             58.8            156.6
                                             --------         --------         --------         --------
OPERATING INCOME (LOSS) ............            (41.1)          (161.4)           (16.1)           (97.4)

OTHER INCOME .......................              0.1             (1.3)             0.4              0.2
                                             --------         --------         --------         --------
INCOME (LOSS) BEFORE TAX PROVISION .            (41.0)          (162.7)           (15.7)           (97.2)

PROVISION FOR INCOME TAXES .........             (4.5)            (4.5)            (3.9)            (1.4)
                                             --------         --------         --------         --------
NET INCOME (LOSS) FOR THE PERIOD ...            (45.5)%         (167.2)%          (19.6)%          (98.6)%
                                             ========         ========         ========         ========
</TABLE>










                                            -11-


<PAGE>   12

THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED
JUNE 30, 1996

         Revenue - Revenue increased by $13.6 million (278%) for the three
months ended June 30, 1997 as compared to the three months ended June 30, 1996.
This increase in revenue is due to revenue contributed by Alliance and MDSI UK
during the three months ended June 30, 1997 of $10.1 million and the continued
growth of the existing business.

         Software and services revenue increased by $7.3 million (189%) for the
three months ended June 30, 1997 as compared to the three months ended June 30,
1996. This increase is due primarily to the acquisitions of Alliance and MDSI UK
in April 1997 and June 1996, respectively, and additional revenue from customers
in both the telecommunications and utility markets.

         Terminals and infrastructure revenue of $4.7 million for the three
months ended June 30, 1997 represents revenue from the MDSI UK operations.

         Third party products and services revenue of $2.0 million primarily
represents revenue earned from certain customers in the utility market pursuant
to agreements under which the Company provides third party products and
services, typically host computer equipment and mobile computing devices, as
part of the installation of software and provision of services. The Company
anticipates that revenue from deliveries of third party products and services
will fluctuate in future periods given the timing of certain contracts and the
rollout schedules which are established primarily by the customers. Accordingly,
the Company may experience large fluctuations in revenue, direct costs, gross
profits and income from operations in future periods.

         Maintenance and support revenue was $659,000 for the three months ended
June 30, 1997 as compared to $528,000 for the three months ended June 30, 1996.
Maintenance and support revenue is expected to fluctuate as such revenue
generally corresponds to the level of software and services revenue as the
Company is engaged to provide support for its installations.


         Direct Costs - Direct costs were 51.2% of revenue for the three months
ended June 30, 1997 as compared to 37.7% for the three months ended June 30,
1996. Direct costs include labor and other costs directly related to a project
including those related to the provision of services and support, production and
inventory costs associated with terminals and infrastructure equipment provided
by MDSI UK and costs related to host equipment and mobile devices on behalf of
third party product sales. Labor costs included direct payroll, benefits and
overhead charges. The increase for the three months ended June 30, 1997 relates
primarily to the acquisition of MDSI UK, which has a higher direct costs related
to its terminals and infrastructure revenue, and the volume of third party
products delivered during the quarter which also have a higher component of
direct costs.


         Gross Margins. Gross margins were 48.8% of revenue for the three months
ended June 30, 1997 as compared to 62.3% for the three months ended June 30,
1996. The decrease in gross margins was due primarily to the addition of new
sources of revenue from third party products and services and existing contracts
acquired with the MDSI UK operations.

         Gross margins on software and services revenue for the three months
ended June 30, 1997, excluding revenue from MDSI UK, were within the 60-70%
range historically achieved by the Company. Gross margins on revenue from MDSI
UK for the three months ended June 30, 1997 was approximately 23.0%. These lower
gross margins on MDSI UK revenue are a result of lower margins originally bid by
MDSI UK, significant development costs being included in the projects, and cost
overruns in the implementation of certain contracts. The Company is in the
process of implementing several changes associated with the pricing, product
specifications and implementation of contracts within MDSI UK that are intended
to improve gross margins on software and services. The Company anticipates that
these changes will not significantly affect gross margins until completion of
existing contracts and that, due to the long sales and implementation cycle for
such contracts, improvements in gross margins from MDSI UK, if any, will take in
excess of 12 months to achieve. There can be no assurance, however,






                                      -12-

<PAGE>   13

that the procedures implemented by the Company will result in improvements to
the gross margins from MDSI UK.

         Research and Development. Research and development expenses were 10.0%
of revenue for the three months ended June 30, 1997 and 14.5% of revenue for the
three months ended June 30, 1996. Total research and development expenditures
for the three months ended June 30, 1997 of $1.8 million represents an increase
of $1.1 million (157%) as compared to the same period in 1996. The decrease of
research and development expenses as a percentage of revenue, as compared to the
same period in 1996, is a result of the Company's increased revenue base, which
includes sources of revenue other than MDSI products such as third party
products and services. The increase in research and development expenses in 1997
is a result of the continued development and enhancement of the Company's
Advantex products. The Company anticipates continuing to commit a significant
portion of its product revenues to enhancement of existing products and the
development of new products, resulting in an anticipated increase in the dollar
amounts of research and development expenses.

         Sales and Marketing. Sales and marketing expenses were 15.7% of revenue
for the three months ended June 30, 1997 and 21.5% of revenue for the three
months ended June 30, 1996. This represents an increase of $1.8 million (175%)
as compared to the same period in 1996. The increase was primarily due to an
increase in marketing, sales and technical support personnel. The Company
anticipates that the dollar amounts of its sales and marketing expenses will
continue to increase as the result of the addition of new sales and marketing
personnel and increased marketing activities worldwide.

         General and Administrative. General and administrative expenses were
8.9% of revenue for the three months ended June 30, 1997 and 12.4% of revenue
for the three months ended June 30, 1996. Total general and administrative
expenses of $1.6 million represents an increase of $1.0 million (171%) for the
three months ended June 30, 1997 as compared to the same period in 1996. The
increase was due primarily to the hiring of additional accounting and
administrative personnel to support the Company's growth and the inclusion of
costs associated with Alliance and MDSI UK. The Company expects that its general
and administrative expenses will increase in the future as the Company expands
its staffing, information systems and other administrative costs to support its
expanding operations.

         Other Income. Other income (expense) was $19,000 for the three months
ended June 30, 1997 as compared to $(63,000) for the three months ended June 30,
1996. Substantially all of other income relates to interest income (expense) on
cash and short term deposits and certain indebtedness.

         Income Taxes. The Company provided for income taxes on earnings for the
three months ended June 30, 1997 at the rate of 31.1%, after adjusting for the
amortization of intangible assets related to acquired research and development
costs, as compared to the three months ended June 30, 1996 at a rate of 35.7%.
The reduced rate during the three months ended June 30, 1997 reflects the
application of certain operating loss carry forwards against taxable income and
the blended effect of Canadian, US, UK and other foreign jurisdictions' tax
rates.


SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996

         Revenue - Revenue increased by $28.1 million (334%) for the six months
ended June 30, 1997 as compared to the six months ended June 30, 1996. This
increase in revenue is due to revenue contributed by Alliance and MDSI UK during
the six months ended June 30, 1997 of $13.5 million and the continued growth of
existing businesses.

         Software and services revenue increased by $11.8 million (181%) for the
six months ended June 30, 1997 as compared to the six months ended June 30,
1996. This increase is due primarily to the acquisitions of Alliance and MDSI UK
in April 1997 and June 1996, respectively, and additional revenue from customers
in both the telecommunications and utility markets.






                                      -13-

<PAGE>   14

         Terminals and infrastructure revenue of $6.5 million for the six months
ended June 30, 1997 represents revenue from the MDSI UK operations.

         Third party products and services revenue of $10.2 million for the six
months ended June 30, 1997 represents revenue earned from certain customers in
the utility market pursuant to agreements under which the Company provides third
party products and services, typically host computer equipment and mobile
computing devices, as part of the installation of software and provision of
services. A substantial portion of this revenue was attributable to the delivery
of host computer equipment and mobile computing devices to Pacific Gas &
Electric during the six months ended June 30, 1997. The Company anticipates that
revenue from deliveries of third party products and services will fluctuate in
future periods given the timing of certain contracts and the rollout schedules
which are established primarily by the customers. Accordingly, the Company may
experience large fluctuations in revenue, direct costs, gross profits and income
from operations in future periods.

         Maintenance and support revenue was $1.5 million for the six months
ended June 30, 1997 as compared to $1.2 million for the six months ended June
30, 1996. Maintenance and support revenue is expected to fluctuate as such
revenue generally corresponds to the level of software and services revenue as
the Company is engaged to provide support for its installations.


         Direct Costs - Direct costs were 57.3% of revenue for the six months
ended June 30, 1997 as compared to 40.8% for the six months ended June 30, 1996.
Direct costs include labor and other costs directly related to a project
including those related to the provision of services and support, production and
inventory costs associated with terminals and infrastructure equipment provided
by MDSI UK and costs related to host equipment and mobile devices on behalf of
third party product sales. Labor costs included direct payroll, benefits and
overhead charges. The increase for the six months ended June 30, 1997 relates
primarily to the acquisition of MDSI UK, which has a higher direct costs related
to its terminals and infrastructure revenue, and the large volume of third party
products delivered during the quarter which also have a higher component of
direct costs.


         Gross Margins. Gross margins were 42.7% of revenue for the six months
ended June 30, 1997 as compared to 59.2% for the six months ended June 30, 1996.
The decrease in gross margins was due primarily to the addition of new sources
of revenue from third party products and services and existing contracts
acquired MDSI UK operations.

         Gross margins on software and services revenue for the six months ended
June 30, 1997 for MDSI, excluding revenue from MDSI UK, were within the 60-70%
range historically achieved by the Company. Gross margins on revenue from MDSI
UK for the six months ended June 30, 1997 was approximately 30%. These lower
gross margins on MDSI UK revenue are a result of lower margins originally bid by
MDSI UK, significant development costs being included in the projects, and cost
overruns in the implementation of certain contracts. The Company is in the
process of implementing several changes associated with the pricing, product
specifications and implementation of contracts within MDSI UK that are intended
to improve gross margins on software and services. The Company anticipates that
these changes will not significantly affect gross margins until completion of
existing contracts and that, due to the long sales and implementation cycle for
such contracts, improvements in gross margins from MDSI UK, if any, will take in
excess of 12 months to achieve. There can be no assurance, however, that the
procedures implemented by the Company will result in improvements to the gross
margins from MDSI UK.

         Research and Development. Research and development expenses were 8.9%
of revenue for the six months ended June 30, 1997 and 17.9% of revenue for the
six months ended June 30, 1996. Total research and development expenditures for
the six months ended June 30, 1997 of $3.2 million represents an increase of
$1.7 million (115%) as compared to the same period in 1996. The decrease of
research and development expenses as a percentage of revenue, as compared to the
same period in 1996, is a result of the Company's increased revenue base, which
includes sources of revenue other than MDSI products such as third party
products and services. The increase in research and development expenses in 1997
is a result of the continued development and enhancement





                                      -14-

<PAGE>   15

of the Company's Advantex products. The Company anticipates continuing to commit
a significant portion of its product revenues to enhancement of existing
products and the development of new products, resulting in an anticipated
increase in the dollar amounts of research and development expenses.

         Sales and Marketing. Sales and marketing expenses were 13.8% of revenue
for the six months ended June 30, 1997 and 24.3% of revenue for the six months
ended June 30, 1996. This represents an increase of $3.0 million (146%) as
compared to the same period in 1996. The increase in sales and marketing
expenses was primarily due to an increase in marketing, sales and technical
support personnel. The Company anticipates that the dollar amounts of its sales
and marketing expenses will continue to increase as the result of the addition
of new sales and marketing personnel and increased marketing activities
worldwide.

         General and Administrative. General and administrative expenses were
7.7% of revenue for the six months ended June 30, 1997 and 12.6% of revenue for
the six months ended June 30, 1996. Total general and administrative expenses of
$2.8 million represents an increase of $1.7 million (165%) for the six months
ended June 30, 1997, as compared to the same period in 1996. The increase was
due primarily to the hiring of additional accounting and administrative
personnel to support the Company's growth and inclusion of costs associated with
Alliance and MDSI UK. In addition, the Company expects that its general and
administrative expenses will increase in the future as the Company expands its
staffing, information systems and other administrative costs to support its
expanding operations.

         Other Income. Other income was $134,000 for the six months ended June
30, 1997 as compared to $21,000 for the six months ended June 30, 1996.
Substantially all of other income (expense) relates to interest income on cash
and short term deposits and certain indebtedness.

         Income Taxes. The Company provided for income taxes on earnings for the
six months ended June 30, 1997 at the rate of 30.6%, after adjusting for the
amortization of intangible assets related to acquired research and development
costs, as compared to the six months ended June 30, 1996 at a rate of 30.5%. The
rate during the six months ended June 30, 1997 reflects the application of
certain operating loss carry forward against taxable income and the blended
effect of Canadian, US, UK and other foreign jurisdictions' tax rates.


LIQUIDITY AND CAPITAL RESOURCES

         The Company finances its operations, acquisitions and capital
expenditures with cash generated from operations, loans, a private placement and
a public offering completed on December 2, 1996. At June 30, 1997, the Company
had cash and cash equivalents of $12.0 million and working capital of $17.4
million.

         Cash used in operating activities was $5.3 million for the six months
ended June 30, 1997 compared to $1.2 million for the six months ended June 30,
1996. The outflow of cash from operating activities is caused primarily by the
increase in unbilled accounts receivable of $7.6 million to $10.4 million.
Unbilled accounts receivable arise where the Company has earned revenue on a
project though has yet to meet specific milestone billing targets under the
terms of the applicable contract. In addition, there was a decrease in trade
accounts receivable of $3.8 million and a decrease in accounts payable and
accrued liabilities of $2.4 million, net of amounts acquired with Alliance, due
in part to receipts/payments for third party products and services which had
been accrued at December 31, 1996. Further, work in progress increased by $3.2
million to $4.7 million at June 30, 1997 due to certain third party hardware and
terminals and infrastructure which the Company had not delivered at June 30,
1997.

         Cash provided by (used in) financing activities of $(122,000) during
the six months ended June 30, 1997 relates to proceeds from common shares issued
for $902,000 pursuant to the Company's Employee Share Purchase Plan and the
exercise of stock options, net of repayments for the remaining loan notes from
the MDSI UK acquisition, certain long-term debt and capital leases for $428,000,
$574,000 and $22,000 respectively. In addition, during the six months ended
June 30, 1997, the Company issued 252,000







                                      -15-


<PAGE>   16

common shares and 252,000 common share purchase warrants on the exercise of
252,000 special warrants. The Company received no additional consideration on
the exercise of the special warrants.

         In connection with the acquisition of Alliance effective April 17,
1997, the Company issued 347,750 Common Share and paid $2,188,750 
(US$1,582,088), consisting of cash payments of $1,892,426 (US$1,367,869) and
unsecured notes of $296,324 (US$214,219) which bear interest at a rate of 6.07%
and mature on January 1, 1999. This acquisition was completed on July 1, 1997.
Concurrent with the completion of the acquisition on July 1, 1997, the Company
closed Alliance's operating line of credit and repaid the outstanding balance of
US$850,000. In addition, the Company repaid certain other outstanding debt of
Alliance subsequent to June 30, 1997 in the amount of US$1.9 million.

         Cash used in investing activities was $2.8 million for the six months
ended June 30, 1997 as compared to $1.5 million for the six months ended June
30, 1996. Total investing activity during the six months ended June 30, 1997
consisted of cash payments of $1.9 million on behalf of the Alliance acquisition
and purchases of capital assets for $945,000, including computer hardware and
software for use in research and development activities and to support the
growth of the Company's corporate information systems.

         Existing sources of liquidity at June 30, 1997 include $12.0 million of
cash and cash equivalents and funds available under the Company's operating line
of credit. During the six months ended June 30, 1997, the Company increased its
borrowing capacity under this line of credit whereby it may now borrow up to a
limit of $5 million. At June 30, 1997, US$200,000 of such amount was committed
to securing the Company's obligations under outstanding letters of credit and
approximately $245,000 was committed to securing obligations under certain
foreign exchange forward contracts. Under the terms of the agreement, borrowings
and letters of credit under the line are limited to 60% to 90% of eligible
accounts receivable. Borrowings accrue interest at the bank's prime rate plus
0.5%. From time to time, the Company draws on the line of credit for general
working capital requirements related to its operations. At June 30, 1997, the
Company had drawn $2.3 million which was repaid in full on July 3, 1997. In
certain circumstances, the Company is also required to provide a bank guarantee
to secure performance of a contract. At June 30, 1997, the Company has provided
a bank guarantee in the amount of DKK4,374,000 Danish krone ($930,350) in
respect of one contract.

         The Company believes that it has sufficient funds to meet cash
requirements for at least the next twelve months. Commensurate with its past and
expected future growth, the Company may increase, from time to time, its
borrowing facility under its operating line of credit to support its operations.
Cash on hand at June 30, 1997 was used in part to finance the acquisition of
Alliance on July 1, 1997 and may use cash to fund other acquisitions of
businesses or products complementary to the Company's business, although the
Company has no plans to do so. The Company has no material additional
commitments other than operating leases. Future growth or other investing
activities may require the Company to obtain additional equity or debt
financing, which may or may not be available on attractive terms, or at all, or
may be dilutive to current or future shareholders.






                                      -16-

<PAGE>   17



PART II -  OTHER INFORMATION

           ITEM 1.      LEGAL PROCEEDINGS

                        As of the date hereof, there is no material litigation
           pending against the Company. From time to time, the Company is a
           party to litigation and claims incident to the ordinary course of
           business. While the results of litigation and claims cannot be
           predicted with certainty, the Company believes that the final outcome
           of such matters will not have a material adverse effect on the
           Company's business, financial condition and results of operations.


           ITEM 2.      CHANGES IN SECURITIES

                        None.


           ITEM 3.      DEFAULTS UPON SENIOR SECURITIES

                        None.

           ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                        The Company's Annual General Meeting of Shareholders was
           held on May 8, 1997. A total of 3,962,996 shares of the Company's
           common stock were represented in person or by proxy at the Meeting,
           representing 66.1% of the total number of shares of the Company's
           common stock outstanding on March 26, 1997, the record date for the
           Meeting.

                        At the Meeting, the shareholders approved the resolution
           to fix the number of Directors of the Company at seven. The following
           table sets forth the information regarding the voting on the
           proposal:


<TABLE>
<CAPTION>
                  VOTES CAST FOR PROPOSAL      VOTES CAST AGAINST PROPOSAL        ABSTENTIONS       NOT VOTED
                  -----------------------      ---------------------------        -----------       ---------
                  <S>                          <C>                                <C>                 <C>
                        3,222,664                         200                          0              740,132  
</TABLE>

                        All of the current Directors of the Company, were
           re-elected to serve as Directors until the 1997 Annual General
           Meeting or until their earlier retirement, resignation, or removal.
           The following table sets forth the voting in the election for
           Directors:


<TABLE>
<CAPTION>
            NOMINEE                    VOTES CAST FOR NOMINEE         VOTES WITHHELD          ABSTENTIONS          NOT VOTED
            -------                    ----------------------         --------------          -----------          ---------
            <S>                        <C>                             <C>                     <C>                 <C>   
            Erik Dysthe                      2,150,842                     160                    59,350           1,752,644  
            Kenneth R. Miller                2,150,842                     160                    59,350           1,752,644     
            Terrence P. McGarty              2,150,842                     160                    59,350           1,752,644
            Robert C. Harris, Jr.            2,150,842                     160                    59,350           1,752,744
            Gerald F. Chew                   2,150,842                     160                    59,350
            Bruno Ducharme                   2,150,842                     160                    59,350
            Marc Rochefort                   2,150,842                     160                    59,350
</TABLE>


                        The shareholders approved the proposed 1997 Stock Option
           Plan. The following table sets forth the information regarding the
           voting on the proposal:

<TABLE>
<CAPTION>
                        VOTES CAST FOR PROPOSAL      VOTES CAST AGAINST PROPOSAL       ABSTENTIONS       NOT VOTED
                        -----------------------      ---------------------------       -----------       ---------
                         <S>                          <C>                               <C>              <C>    
                               1,141,024                      633,933                    400,369         1,787,670
</TABLE>








                                      -17-
<PAGE>   18


                        The shareholders ratified the appointment of Deloitte &
           Touche as the Company's Auditors' for the fiscal year ending December
           31, 1997. The following table sets forth the information regarding
           the voting on the proposal:


<TABLE>
<CAPTION>
                        VOTES CAST FOR PROPOSAL             VOTES WITHHELD             ABSTENTIONS              NOT VOTED
                        -----------------------             --------------             -----------              ---------

                        <S>                                 <C>                         <C>                      <C>
                                3,222,704                         160                       0                    740,132
</TABLE>


                        The shareholders authorized the Directors to fix the
           Auditors' remuneration. The following table sets forth the
           information regarding the voting on the proposal:

<TABLE>
<CAPTION>
                        VOTES CAST FOR PROPOSAL      VOTES CAST AGAINST PROPOSAL       ABSTENTIONS        NOT VOTED
                        -----------------------      ---------------------------       -----------        ---------
                         <S>                          <C>                              <C>                 <C>
                                3,222,864                          0                        0              740,132    
</TABLE>


           ITEM 5.      OTHER INFORMATION

                        None.

           ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K

                        A) EXHIBITS

                           Exhibit 11.1     Computation of Earnings (loss) per
                                            Common Share.

                        B) REPORTS ON FORM 8-K

                           On July 1, 1997, the Registrant filed a report on
                           Form 8-K announcing the completion of the 
                           Registrant's acquisition of Alliance Systems,
                           Incorporated and incorporating by reference the
                           Registrant's financial statements and pro forma
                           financial information contained in the Registrant's
                           registration statement on Form F-4 (No. 333-07010).
















                                      -18-


<PAGE>   19



SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                     MDSI MOBILE DATA SOLUTIONS INC.


Date:    August 14, 1997             By:      /s/ ERIK DYSTHE
                                              ---------------------------------
                                     Name:    Erik Dysthe
                                     Title:   Chairman and Chief Executive
                                              Officer




Date:    August 14, 1997             By:      /s/ VERNE D. PECHO
                                              ---------------------------------
                                     Name:    Verne D. Pecho
                                     Title:   Vice President Finance & 
                                              Administration and Chief Financial
                                              Officer (Principal Financial and
                                              Accounting Officer)








                                      -19-

<PAGE>   20



                         MDSI MOBILE DATA SOLUTIONS INC.

                                  EXHIBIT INDEX

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997





EXHIBIT 11.1
COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE.............................21

























                                      -20-