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

                                  UNITED STATES
                       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 March 31, 2002

                                       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.)


                              10271 Shellbridge Way
                           Richmond, British Columbia,
                                 Canada V6X 2W8
                                 (604) 207-6000
   (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 May 10, 2002 was 8,861,765.


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


<PAGE>



                         MDSI Mobile Data Solutions Inc.

                             INDEX TO THE FORM 10-Q
                  For the quarterly period ended March 31, 2002


                                                                          Page

PART I -  FINANCIAL INFORMATION

  ITEM 1. FINANCIAL STATEMENTS...............................................1

          CONDENSED CONSOLIDATED BALANCE SHEETS..............................1

          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS................... 2

          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS....................3

          NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS...........4

  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS...............................10

  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........21

PART II - OTHER INFORMATION.................................................22

  ITEM 1. LEGAL PROCEEDINGS ................................................22

  ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K..................................22


SIGNATURES..................................................................24





<PAGE>

Part I -  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                         MDSI MOBILE DATA SOLUTIONS INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (Expressed in United States dollars)
                                   (Unaudited)


<TABLE>
                                                                                              As at
                                                                             -----------------------------------
                                                                                 March 31,          December 31,
                                                                                   2002                2001
                                                                             -----------------------------------
<S>                                                                            <C>                  <C>
ASSETS
CURRENT ASSETS
    Cash and cash equivalents                                                  $ 13,414,529         $13,691,714
    Accounts receivable, net
       Trade (net of allowance for doubtful accounts $3,906,874;
          2001 - $3,933,287)                                                      7,590,469          10,764,038
       Unbilled                                                                   5,360,506           4,331,924
    Income taxes receivable                                                         595,647             366,506
    Prepaid expenses and other assets                                             1,976,906           2,059,082
                                                                             ---------------       -------------
                                                                                 28,938,057          31,213,264

CAPITAL ASSETS, NET                                                               8,688,805           9,249,055
LONG TERM RECEIVABLE                                                              3,749,860           3,749,860
DEFERRED INCOME TAXES                                                               364,640             364,640
                                                                             ---------------       -------------
TOTAL ASSETS                                                                     41,741,362          44,576,819
                                                                             ===============       =============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
    Accounts payable                                                            $ 1,879,893         $ 2,451,853
    Accrued liabilities                                                           5,064,393           5,685,905
    Deferred revenue                                                              6,776,121           7,713,068
    Current portion of long-term debt                                                39,041              39,041
    Current obligations under capital lease                                       2,350,973           2,589,320
                                                                             ---------------       -------------
                                                                                 16,110,421          18,479,187

OBLIGATIONS UNDER CAPITAL LEASES                                                  1,223,809           1,622,879
                                                                             ---------------       -------------
TOTAL LIABILITIES                                                                17,334,230          20,102,066

STOCKHOLDERS' EQUITY
    Common stock                                                                 48,731,224          48,519,060
    Additional paid-up capital                                                      522,621             522,621
    Treasury stock                                                                  (85,043)            (85,043)
    Accumulated other comprehensive (loss)                                         (690,104)           (690,104)
    Deficit                                                                     (24,071,566)        (23,791,781)
                                                                             ---------------       -------------
TOTAL STOCKHOLDERS' EQUITY                                                       24,407,132          24,474,753
                                                                             ---------------       -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                     $ 41,741,362         $44,576,819
                                                                             ===============       =============
</TABLE>

Contingency (note 7)

             See Notes to Condensed Consolidated Financial Statements



                                       1
<PAGE>
                         MDSI MOBILE DATA SOLUTIONS INC.
                 Condensed Consolidated Statements of Operations
                      (Expressed in United States dollars)
                                   (Unaudited)

<TABLE>
                                                                       Three months ended March 31,
                                                                 ------------------------------------
                                                                        2002               2001
                                                                 ----------------     ---------------
<S>                                                               <C>                   <C>
REVENUE
    Software and services                                          $   5,807,093        $  9,403,484
    Hosting & information technology services                          2,461,273           4,503,596
    Maintenance and support                                            2,557,073           2,456,604
    Third party products and services                                    415,327           1,147,417
                                                                 ----------------     ---------------
                                                                      11,240,766          17,511,101

DIRECT COSTS                                                           5,699,853           9,797,234
                                                                 ----------------     ---------------
GROSS PROFIT                                                           5,540,913           7,713,867
OPERATING EXPENSES
    Research and development                                           1,460,035           2,543,781
    Sales and marketing                                                2,747,187           3,464,637
    General and administrative                                         1,799,605           1,702,780
    Restructuring Charge (note 5)                                              -           1,200,000
    Provision for doubtful accounts                                            -           1,202,634
    Amortization and provision for valuation of
      intangible assets (note 4)                                               -           1,637,058
                                                                 ----------------     ---------------
                                                                       6,006,827          11,750,890
                                                                 ----------------     ---------------
OPERATING LOSS                                                          (465,914)         (4,037,023)

VALUATION ALLOWANCE ON INVESTMENTS (note 6)                                    -           2,749,992

OTHER INCOME (EXPENSE)                                                    60,429             (60,234)
                                                                 ----------------     ---------------
LOSS BEFORE TAX PROVISION                                               (405,485)         (6,847,249)

RECOVERY OF INCOME TAXES                                                 125,700             693,164
                                                                 ----------------     ---------------
NET LOSS                                                                (279,785)         (6,154,085)

DEFICIT, BEGINNING OF PERIOD                                         (23,791,781)         (9,685,088)
                                                                 ----------------     ---------------

DEFICIT, END OF PERIOD                                             $ (24,071,566)      $ (15,839,173)
                                                                 ================     ===============
Loss per common share
    Basic                                                          $       (0.03)      $       (0.71)
                                                                 ================     ===============
    Diluted                                                        $       (0.03)      $       (0.71)
                                                                 ================     ===============
Weighted average shares outstanding
    Basic                                                              8,726,314           8,619,199
                                                                 ================     ===============
    Diluted                                                            8,726,314           8,619,199
                                                                 ================     ===============
</TABLE>


            See Notes to Condensed Consolidated Financial Statements


                                       2
<PAGE>
                         MDSI MOBILE DATA SOLUTIONS INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Expressed in United States dollars)
                                   (Unaudited)



<TABLE>
                                                                        Three months ended March 31,
                                                                    -----------------------------------
                                                                         2002                 2001
                                                                    --------------      ---------------
<S>                                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net loss from continuing operations                             $   (279,785)        $ (6,154,085)
     Items not affecting cash:
         Depreciation, amortization and provision for
           valuation of intangible assets                                 885,807            2,500,921
         Valuation allowance on investments                                     -            2,749,992
         Deferred income taxes                                                  -             (361,000)
         Changes in non-cash operating working capital items             (132,397)             722,347
                                                                    --------------      ---------------
     Net cash provided by (used in) operating activities                  473,625             (541,825)
                                                                    --------------      ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
     Issuance of Common Shares                                            212,164               97,032
     Repayment of long-term debt                                                -              (27,927)
     Repayment of capital leases                                         (637,417)            (377,211)
                                                                    --------------      ---------------
     Net cash used in financing activities                               (425,253)            (308,106)
                                                                    --------------      ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
     Repayment of lease receivable                                              -              100,078
     Proceeds on sale of investments                                            -              331,458
     Acquisition of capital assets                                       (325,557)          (1,409,361)
                                                                    --------------      ---------------
     Net cash used in investing activities                               (325,557)            (977,825)
                                                                    --------------      ---------------
     Net cash used in continuing operations                              (277,185)          (1,827,756)
                                                                    --------------      ---------------
     Net cash provided by discontinued operations (note 8)                      -              118,832
                                                                    --------------      ---------------
NET CASH OUTFLOW                                                         (277,185)          (1,708,924)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                         13,691,714           13,238,081
                                                                    --------------      ---------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                             $ 13,414,529         $ 11,529,157
                                                                    ==============      ===============
</TABLE>




                 See Notes to Consolidated Financial Statements


                                       3
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

            Notes to the Condensed Consolidated Financial Statements
                      (Expressed in United States 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 Annual  Report of MDSI Mobile
          Data  Solutions  Inc. (the "Company" or "MDSI") filed on Form 10-K for
          the year ended December 31, 2001.


     (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.  Estimates  are used for, but not limited to, the  accounting
          for  doubtful  accounts,   amortization,   determination  of  the  net
          recoverable  value  of  assets,   revenue   recognized  on  long  term
          contracts,  taxes and contingencies.  Actual results could differ from
          those estimates.


     (c)  Reporting Currency

          The  Company  changed  its  reporting  currency  to  the  U.S.  dollar
          effective  January 1, 2000. The change in reporting  currency was made
          to improve  investors'  ability to compare the Company's  results with
          those of most other publicly traded businesses in the industry.  These
          consolidated   financial   statements  and  those  amounts  previously
          reported  in  Canadian  dollars  have been  translated  from  Canadian
          dollars to U.S.  dollars by translating  assets and liabilities at the
          rate in effect at the  respective  balance sheet date and revenues and
          expenses at the average rate for the reporting  period.  Any resulting
          foreign exchange gains and losses are recorded as a separate component
          of  shareholder  equity and  described  as  accumulated  comprehensive
          income (loss).  There was no effect on comprehensive income for any of
          the periods presented in this report.


     (d)  Recently issued accounting standards

          In July 2001, the Financial Accounting Standards Board ("FASB") issued
          Statement  of Financial  Accounting  Standards  No. 141 ("SFAS  141"),
          "Business  Combinations."  SFAS 141 requires  the  purchase  method of
          accounting for business combinations initiated after June 30, 2001 and
          eliminates the  pooling-of-interests  method. The adoption of SFAS 141
          has  not  had  a  significant   impact  on  the  Company's   financial
          statements.

          In July  2001,  the FASB  issued  Statement  of  Financial  Accounting
          Standards  No.  142  ("SFAS  142"),  "Goodwill  and  Other  Intangible
          Assets", which is effective January 1, 2002. SFAS 142 requires,  among
          other  things,  the  discontinuance  of  goodwill   amortization.   In
          addition, the standard includes provisions for the reclassification of
          certain existing recognized  intangibles as goodwill,  reassessment of
          the useful lives of existing recognized intangibles,  reclassification
          of certain  intangibles  out of previously  reported  goodwill and the
          identification of reporting units for purposes of assessing  potential
          future impairments of goodwill.  SFAS 142 also requires the Company to
          complete a transitional  goodwill  impairment test six months from the
          date of adoption.  The adoption of SFAS 142 has not had a  significant
          impact on the Company's financial statements.


                                       4
<PAGE>
                         MDSI MOBILE DATA SOLUTIONS INC.

            Notes to the Condensed Consolidated Financial Statements
                      (Expressed in United States dollars)
                                   (Unaudited)


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

     (d)  Recently issued accounting standards (continued)

          In October  2001,  the FASB issued SFAS No. 144,  "Accounting  for the
          Impairment or Disposal of Long-Lived Assets." This statement addresses
          financial  accounting  and reporting for the impairment or disposal of
          long-lived assets.  This statement  supersedes FASB Statement No. 121,
          "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
          Assets to Be Disposed Of," and the accounting and reporting provisions
          of APB  Opinion  No.  30,  "Reporting  the  Results  of  Operations  -
          Reporting  the Effects of  Disposal  of a Segment of a  Business,  and
          Extraordinary,   Unusual  and   Infrequently   Occurring   Events  and
          Transactions."  This  Statement  also amends ARB No. 7,  "Consolidated
          Financial Statements," to eliminate the exception to consolidation for
          a  subsidiary  for  which  control  is likely  to be  temporary.  This
          Statement  requires that one  accounting  model be used for long-lived
          assets to be disposed of by sale,  whether previously held and used or
          newly  acquired.  This  Statement  also broadens the  presentation  of
          discontinued  operations  to include more disposal  transactions.  The
          provisions  of this  standard have been adopted as at the beginning of
          fiscal  2002 and  have  had no  significant  impact  on the  Company's
          financial statements.


2.   SEGMENTED INFORMATION

     Segmented information

     During the three  months  ended June 30, 2001,  the Company  realigned  its
     internal operating structure. As a result of this realignment,  the Company
     now considers its Advantex and Wireless ASP product lines part of its Field
     Service   segment,   and  has  renamed  the  segment   previously  know  as
     "e-Business", "Hosting and IT Services" to better reflect the nature of the
     business  activity in this  segment.  Also as a result of the  realignment,
     certain   figures   previously   classified  as  Hosting  and  IT  Services
     (e-Business) have been  reclassified to the Field Service segment.  For the
     three  months  ended  March  31,  2001,  the  reclassification  results  in
     operating   earnings   increasing   in  Hosting  and  IT  Services  (and  a
     corresponding  decrease in Field Service) by $563,942.  There is nil effect
     of the reclassification on revenues for any of the periods presented.

     Business Segments

<TABLE>
                                             Three months ended March 31, 2002          Three months ended March 31, 2001
                                       -----------------------------------------   -------------------------------------------
                                          Field       Hosting and                      Field       Hosting and
                                         Service     IT Services(1)      Total        Service      IT Services(1)    Total
                                       ---------------------------------------------------------------------------------------
             <S>                       <C>             <C>           <C>            <C>               <C>           <C>
             Revenue                   $ 8,600,555    $2,640,211    $11,240,766    $12,976,660       $4,534,441    $17,511,101
             Operating earnings
               (loss)                     (568,134)      102,220       (465,914)    (4,155,623)         118,600     (4,037,023)
             Depreciation &
               Amortization                673,593       212,214        885,807      2,343,367          157,554      2,500,921

             Long lived assets (2)      10,922,411     1,516,254     12,438,665      9,795,157        2,034,837     11,829,994
             Capital Expenditures          131,975       193,582        325,557        971,074          438,287      1,409,361
            ------------------------
               (1)  The Hosting and IT Services (formerly  e-Business) operating
                    segment also includes revenues from third-party products and
                    services.
               (2)  Long  lived  assets  consist  of the long  term  receivable,
                    investments, capital and intangible assets.

</TABLE>



                                       5
<PAGE>
                         MDSI MOBILE DATA SOLUTIONS INC.

            Notes to the Condensed Consolidated Financial Statements
                      (Expressed in United States dollars)
                                   (Unaudited)



2.   SEGMENTED INFORMATION (continued)

     Geographic information

     The  Company  earned  revenue  from  sales to  customers  in the  following
     geographic locations:

<TABLE>
                                                             Three months ended
                                                                  March 31,
                                                       ---------------------------------
                                                            2002               2001
                                                       --------------     --------------

     <S>                                              <C>              <C>
     Canada.........................................    $   251,130        $   277,876
     United States..................................      9,073,999         13,355,578
     Europe.........................................      1,915,637          3,042,470
     Asia and Other.................................              -            835,177
                                                       --------------     --------------
                                                        $11,240,766        $17,511,101
                                                       ==============     ==============
</TABLE>

3.   EARNINGS (LOSS) PER COMMON SHARE

     Basic earnings (loss) per common share is calculated by dividing net income
     (loss) by the weighted average number of common shares  outstanding  during
     the period. Diluted earnings (loss) per share is calculated by dividing net
     income  (loss) by the sum of the weighted  average  number of common shares
     outstanding  plus  all  additional  common  shares  that  would  have  been
     outstanding  if  potentially  dilutive  common  shares had been issued.  In
     periods  for  which  there is a  reported  net loss,  potentially  dilutive
     securities have been excluded from the calculation as their effect would be
     anti-dilutive.

     The following  table  reconciles the number of shares  utilized in the loss
     per common share calculations for the periods indicated:

                                                        Three months ended
                                                             March 31,
                                                    -------------------------
                                                        2002          2001

       Weighted average shares outstanding.........  8,726,314      8,619,199
       Effect of dilutive securities
       Stock options...............................          -              -
                                                    -----------    -----------
       Diluted weighted average shares outstanding.  8,726,314      8,619,199
                                                    ===========    ===========




                                       6
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

            Notes to the Condensed Consolidated Financial Statements
                      (Expressed in United States dollars)
                                   (Unaudited)


4.   INTANGIBLE ASSETS

<TABLE>
                                                                         March 31,              December 31,
                                                                           2002                     2001
                                                                      ---------------        ----------------
<S>                                                                    <C>                    <C>
     Goodwill                                                          $ 2,615,751            $   2,615,751
     Commercial web site domain name                                       220,000                  220,000
     Less:  accumulated amortization and impairment provision           (2,835,751)              (2,835,751)
                                                                      ---------------        ----------------
                                                                       $         -            $           -
                                                                      ===============        ================
</TABLE>

     In connection  with the  Company's  announced  restructuring  (note 5), the
     Company  determined  that an impairment in the value of Goodwill that arose
     on acquisition of Alliance Systems Inc., had occurred during the year ended
     December 31, 2001. The Company determined an impairment had occurred due to
     poor current and forecasted performance in the acquired Company's business.
     As a result of this impairment the Company  recorded a valuation  allowance
     in its field service  business segment of $1,558,578 which was equal to the
     remaining net book value of the Goodwill.

     During the year ended December 31, 2001 the Company announced that it would
     not direct future resources to develop its e-Service  Manager product line.
     As a result the Company has taken a valuation  allowance in its Hosting and
     IT business  segment of $165,000 which was equal to the remaining  value of
     the  commercial  web site domain name  purchased  to support the  e-Service
     Manager product.


5.   RESTRUCTURING CHARGE

     On  March  30,  2001,  the  Company,  in  response  to  uncertain  economic
     conditions and poor financial  performance,  announced a restructuring plan
     approved by the Company's Board of Directors  designed to reduce  operating
     costs  that  resulted  in the  elimination  of 34 full time and  contractor
     positions.  In connection with the March 30, 2001 restructuring the Company
     recorded a charge of $1.2  million  for the three  months  ended  March 31,
     2001. On May 11, 2001,  the Company  announced a Board  approved  update to
     this plan, that resulted in the elimination of an additional 115 positions.
     As part of the May 11, 2001 restructuring, the Company recorded a charge of
     $4.9  million,  resulting  in a total charge to earnings for the year ended
     December 31, 2001 of $6.1  million.  These  charges  were  reflected in the
     "restructuring charge" line item of the Company's Consolidated Statement of
     Operations. A breakdown of the nature of the charges and the costs incurred
     to date is as follows:

                                                             Total Restructuring
                                                                    Charge
                                                             -------------------
     Workforce reduction                                        $ 3,375,000
     Provision for excess office space                            1,861,000
     Non cash writedown of capital assets                           563,780
     Other                                                          306,147
                                                             -------------------
     Total restructuring charges                                  6,105,927
     Cumulative draw-downs                                       (3,363,427)
                                                             -------------------
     Accrued restructuring charges included in accrued
     liabilities at March 31, 2002                               $2,742,500
                                                             ===================

     For the year ended  December 31, 2001 the Company  recorded a total of $6.1
     million in  restructuring  charges,  taken in  connection  with a corporate
     reorganization  designed  to  reduce  the  Company's  operating  costs  and
     increase



                                       7
<PAGE>
                         MDSI MOBILE DATA SOLUTIONS INC.

            Notes to the Condensed Consolidated Financial Statements
                      (Expressed in United States dollars)
                                   (Unaudited)


5.   RESTRUCTURING CHARGE (continued)

     efficiency by  rationalizing  staffing levels and modifying staff reporting
     relationships.  The Company  expects to use existing cash balances and cash
     flow from  operations  in order to fund  these  charges.  During  the three
     months  ended  March 31, 2002 the  Company  made cash  payments of $391,160
     relating to the restructuring accruals.

     Workforce  reduction  charges  of  $3.4  million  were  taken  relating  to
     severance  and  continued  benefits for the  elimination  of 149  positions
     across all operating  departments and segments of the  organization.  As of
     March 31, 2002, the provision  balance has been drawn down by cash payments
     of approximately $2.3 million.  The remaining provision of $1.1 million for
     terminated  employees  receiving  payments over time, or existing employees
     notified of their  termination  to occur at a future date is expected to be
     utilized by the second half of 2002.

     The  provision  for excess  office space of $1.9 million for the year ended
     December 31, 2001, relates to surplus office space under long term lease by
     the Company at two  locations,  one of which the  Company has entered  into
     fixed cost lease  arrangements  expiring in 2004.  The Company has incurred
     approximately $0.4 million of cash costs relating to this provision leaving
     an accrual of $1.5  million  remaining  as at March 31,  2002.  The Company
     expects that the charge will be fully drawn down no later than the time the
     lease expires in the fourth quarter of 2004.

     Due to the elimination of 149 positions,  certain capital assets  belonging
     to the Company have been declared  surplus and a charge of $0.6 million has
     been recorded to reflect the difference between the previous carrying value
     and the estimated fair market value, net of disposal costs. As at March 31,
     2002, the full amount of the charge has been applied to the assets to value
     them at their estimated net realizable value.  These assets are expected to
     be disposed of by the end of 2002.

     The Company has recorded a $0.3 million  charge for the year ended December
     31, 2001 for other items  including,  costs of outplacement  services,  and
     legal and  consulting  fees. As at March 31, 2002, the Company has incurred
     cash costs of approximately  $0.1 million in connection with these charges,
     leaving a provision of $0.2 million. The Company expects to fully draw down
     this provision by the end of 2002.


6.   INVESTMENTS AND ADVANCES
<TABLE>
                                                             March 31,             December 31,
                                                               2002                   2001
                                                         ---------------          --------------
<S>                                                       <C>                      <C>
     Investment in private companies, at cost             $  2,499,992             $  2,499,992
     Promissory note                                                 -                        -
     Other advances                                            500,000                  500,000
     Valuation Allowance                                    (2,999,992)              (2,999,992)
                                                         ---------------          --------------
     Total Investments                                    $          -             $          -
                                                         ===============          ==============
</TABLE>

     During the year ended December 31, 2000 the Company made equity investments
     of $2,499,992 in two private companies and made advances to a third Company
     of $500,000.  These investments do not represent  significant  influence in
     the  companies  and at December  31, 2000 were valued at cost which was the
     valuation as at the latest round of financing.

     As a result of significant  uncertainty over the future  realization of any
     return on  investment  or capital,  the  Company  has  recorded a valuation
     allowance equal to the full cost of the investments and advances during the
     year ended December 31, 2001.

     During the year ended  December 31,  2001,  Digital  Dispatch  Systems Inc.
     repaid the promissory note received as partial consideration on the sale of
     the Company's Transportation Business Unit to Digital Dispatch Systems Inc.


                                       8
<PAGE>
                         MDSI MOBILE DATA SOLUTIONS INC.

            Notes to the Condensed Consolidated Financial Statements
                      (Expressed in United States dollars)
                                   (Unaudited)


7.   CONTINGENCY

     The Company is involved in a dispute with a customer. The Company has filed
     suit against the customer  alleging that the customer had breached a series
     of contracts,  and failed to pay sums due. The customer has filed an answer
     and counter claim alleging the Company  breached the  contracts,  entitling
     the customer to repayment of all sums paid to the Company of  approximately
     $3.5  million.  The  Company  believes  that its  position in the matter is
     strong and intends to vigorously  pursue  collection.  The Company  expects
     that  collection  of monies  due from the  customer  is not likely to occur
     within one year and as a result has  reclassified  the amounts due from the
     customer of $3,749,860 from current to long term receivable.

     From time to time, the Company is a party to litigation and claims incident
     to the ordinary course of its 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,  operating results and cash
     flows.

8.   DISCONTINUED OPERATIONS

     As a result of the  Company's  decision  to dispose  of its  Transportation
     Business Unit, the  Transportation  Business Unit has been  classified as a
     discontinued operation and the results of operation, financial position and
     cash flow for this segment have been  segregated  from those of  continuing
     operations.  As of March 31, 2002 the Company has  satisfied  all  existing
     obligations of these  operations,  and realized all remaining  assets.  The
     Company   expects  that  no  further   charges  to  income   regarding  the
     Transportation Business Unit will be necessary.





                                       9
<PAGE>

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

Forward-Looking Statements

     Certain  statements  in  this  Quarterly  Report  on Form  10-Q  constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Such forward-looking  statements involve known
and unknown  risks,  uncertainties  and other  factors that may cause the actual
results,  performance or  achievements  of MDSI, or  developments  in the MDSI'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,  the failure of MDSI to achieve anticipated
levels of cost  savings  and the risk that such cost  reductions  may  adversely
affect the ability of MDSI to achieve its  business  objectives,  the failure of
MDSI to  successfully  execute its  business  strategies,  the effect of slowing
United States and international  economies generally, as well as economic trends
and conditions in the vertical markets that MDSI serves, the effect of the risks
associated with technical  difficulties or delays in product  introductions  and
improvements,  product  development,  product  pricing or other  initiatives  of
MDSI's  competitors,  the  possibility  that our potential  customers will defer
purchasing  decisions  due to  economic  or other  conditions  or will  purchase
products  offered  by our  competitors,  the  effect,  if  any,  of any  sale or
disposition  of assets,  the risks  associated  with the  collection of accounts
receivable,   risks   associated   with  litigation  and  the  other  risks  and
uncertainties  described in the risk factors attached as Exhibit 99.1 hereto and
in other  Securities and Exchange  Commission  filings,  including the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.

     Unless  otherwise  noted,  all  financial  information  in this  report  is
expressed in the Company's functional currency,  United States dollars. See Item
3, "Quantitative and Qualitative Disclosures About Market Risk".

Overview

     MDSI develops, markets, implements and supports mobile workforce management
and wireless  connectivity  software for use by a wide variety of companies that
have substantial mobile workforces,  such as utilities,  telecommunications and,
cable/broadband  companies.  MDSI'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  are  designed to 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.  MDSI also provides hosting and
related professional services.

     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)
hosting and information  technology services such as the provision of consulting
services, the provision of application services, and provision of online service
management solutions; (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.


Restructuring

     The Company  believes that economic  conditions  and trends have  adversely
affected and may continue to affect levels of capital spending by companies in a
variety of  industries,  including  companies in the  vertical  markets that the
Company serves. The current excess supply of capacity in the  telecommunications
industry   has   adversely   affected   the   financial    condition   of   many
telecommunications  companies  worldwide.  In addition,  economic conditions and
developments  in the energy  markets have had an adverse effect on the financial
condition of energy and utility  companies in certain  geographic areas of North
America.  The  Company  believes  that these and other  factors  have  adversely
affected  demand for products and  services  offered by the Company,  as certain
prospective and existing customers have delayed or deferred purchasing decisions
or have sought to terminate  existing  contracts for the Company's  products and
services. The Company believes that these factors will continue to affect demand
for the Company's  products and services in 2002,  particularly  in software and
services.  Such  factors may also  increase  the amount of doubtful  accounts or
adversely  affect the  likelihood of collection  of such  accounts.  The Company
believes  that these  trends  are likely to  continue  to  adversely  affect the
Company's revenues and results of operations in future periods.


                                       10
<PAGE>

     In order to address the uncertainties caused by these economic trends, MDSI
announced in March 2001 its intention to reduce its operating  expenses  through
workforce  reductions  and other  measures.  These  measures have been gradually
implemented with incremental  reductions in costs each quarter, and are expected
to result in an estimated $2.9 million in cost reductions per quarter by the end
of 2002. A majority of the savings are expected to be realized by reduced salary
and payroll  costs,  and the remaining  savings are expected to be realized from
the subleasing of excess space,  and a reduction in discretionary  spending.  To
date the Company has realized  quarterly savings of approximately  $2.5 million,
which  represents  the  reduction in the Company's  quarterly  expenses from the
first quarter of 2001 to the first quarter of 2002. The Company expects that the
remaining  $0.4  million  will be realized  through the wind down or sale of the
Company's public safety group, and through regular  attrition in the rest of the
organization.  There can be no  assurance  that the  reduction in work force and
related  restructuring efforts will result in the anticipated cost reductions or
that the work  force  reductions  and other  measures  will not have a  material
adverse affect on the Company's business  operations.

     In connection with this  restructuring,  on March 30, 2001, MDSI terminated
34 employee and contractor positions in Canada and the United States. On May 11,
2001, the Company  continued the  restructuring by announcing the elimination of
an additional 115 positions,  which in combination with the workforce reductions
of March 30, 2001 amounted to approximately  25% of MDSI's staff as of March 30,
2001.  The  Company  recorded  a  one-time  charge of $1.2  million in the first
quarter of 2001  relating  to the  workforce  reductions,  and leasing of excess
office space.  The Company also recorded an additional  charge of  approximately
$4.9  million  in the second  quarter of 2001  relating  to  elimination  of 115
positions, leasing of excess office space, and fixed asset write-downs announced
on May 11, 2001. A breakdown of the nature of the charges and the costs incurred
to date is as follows:

                                                          Total Restructuring
                                                                 Charge
                                                          -------------------
    Workforce reduction                                        $3,375,000
    Provision for excess office space                           1,861,000
    Non cash writedown of capital assets                          563,780
    Other                                                         306,147
                                                          -------------------
    Total restructuring charges                                 6,105,927
    Cumulative draw-downs                                     (3,363,427)
                                                          -------------------
    Accrued restructuring charges as at March 31, 2002         $2,742,500
                                                          ===================

     For the year ended December 31, 2001, the Company  recorded a total of $6.1
million  in  restructuring   charges,  taken  in  connection  with  a  corporate
reorganization  designed to reduce the  Company's  operating  costs and increase
efficiency  by  rationalizing  staffing  levels and  modifying  staff  reporting
relationships.  During the three months  ended March 31, 2002,  the Company made
cash payments of $391,160 relating to the restructuring accruals.

     Workforce  reduction  charges  of  $3.4  million  were  taken  relating  to
severance and continued benefits for the elimination of 149 positions across all
operating  departments and segments of the  organization.  As of March 31, 2002,
the provision balance has been drawn down by cash payments of approximately $2.3
million.  The remaining  provision of $1.1 million is for  terminated  employees
receiving   payments  over  time,  or  existing   employees  notified  of  their
termination to occur at a future date, and is expected to be utilized by the end
of 2002.

     The  provision  for excess  office space of $1.9 million for the year ended
December 31, 2001,  relates to surplus office space under long term lease by the
Company at two  locations,  one of which the Company has entered into fixed cost
lease arrangements expiring in 2004. The Company has incurred approximately $0.4
million  of cash costs  relating  to this  provision  leaving an accrual of $1.5
million remaining as at March 31, 2002. The Company expects that the charge will
be fully  drawn  down not later  than the time the lease  expires  in the fourth
quarter of 2004.

     Due to the elimination of 149 positions,  certain capital assets  belonging
to the Company have been declared  surplus and a charge of $0.6 million has been
recorded to reflect the difference  between the previous  carrying value and the
estimated fair market value,  net of disposal  costs.  As at March 31, 2002, the
full amount of the charge has been  applied to the assets to value them at their
estimated net realizable  value.  These assets are expected to be disposed of by
the end of 2002.


                                       11
<PAGE>

     The Company has recorded a $0.3 million  charge for the year ended December
31, 2001 for other items including,  costs of outplacement  services,  and legal
and  consulting  fees related to the  restructuring.  As at March 31, 2002,  the
Company has incurred cash costs of approximately $0.1 million in connection with
these charges, leaving a provision of $0.2 million. The Company expects to fully
draw down this provision by the end of the second half of 2002.


Field Service Business

     The  implementation  of a complete mobile data solution requires a wireless
data communications  network,  mobile computing devices integrated with wireless
data  communication   modems,   host  computer   equipment,   industry  specific
application  software such as MDSI's Advantex  products,  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 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.

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

     The  Company is  periodically  required  to  provide,  in  addition to MDSI
products and  services,  certain  third party  products,  such as host  computer
hardware and  operating  system  software,  and mobile  computing  devices.  The
Company  recognizes  revenue on the supply of third party hardware upon transfer
of title to the customer.  The Company recognizes revenue on 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 periodically  supply 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 fluctuations in revenue.

     During 2001,  MDSI decided not to continue  pursuing  opportunities  in the
public safety market of its field service segment. These opportunities consisted
of federal,  state and local  agencies that provide  police,  fire,  medical and
other  emergency  services.  The Company had  installed  solutions for a limited
number of customers,  and the market has not  represented a material  portion of
MDSI's  revenues.  The  Company  is  currently  in  the  process  of  evaluating
alternatives  for  this  business,   including  divestiture  and  wind  down  of
operations.  The Company  expects to complete  the process in the second half of
2002.

     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,  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.  Some of the
Company's  contracts are  cancelable  upon notice by the  customer.  The loss of
certain  contracts  could  have a  material  adverse  effect  on  the  Company's
business, financial


                                       12
<PAGE>
condition,  operating  results  and cash  flows.  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.


Hosting and Information Technology (IT) Services (formerly e-Business)

     During the year ended December 31, 2001 the Company  realigned its internal
structure.  As a result of this  realignment,  the  Company  now  considers  its
Advantex ASP product line part of its Field Service segment, and has renamed the
segment previously know as "e-Business",  to "Hosting and IT Services" to better
reflect the nature of the business activity in this segment.

     The  Company's  Hosting  and  IT  Services   operations   provide  advanced
application hosting for many third party solutions including advanced e-commerce
Web sites and the Lotus family of advanced  collaboration  and distance learning
applications.  The  Company's  Hosting  and  IT  Services  operations  can  also
outsource a customer's  networking  needs and provide  management  of its office
LAN/WAN  and  Internet  connections.  The  Company's  Hosting  and  IT  Services
facilities and staff provide the physical  environment and  engineering  support
necessary to keep these  technologies  operating  effectively.  The Company also
provides a variety of IT consulting services, including application development,
system and network engineering, and various operations support services, such as
help desk support, data center management and network management.

     As part of its Hosting and IT Services operations, the Company launched its
eService ManagerTM product.  The eService Manager  application enables consumers
to book  appointments  with  service  providers  online and  allows the  service
provider's  call-takers  to  schedule  appointments  in  response  to  orders by
consumers  via the  telephone.  To date the Company has not  generated  material
revenues from fees associated with its eService Manager scheduling  solution and
the Company has announced  that in the interest of controlling  costs,  it would
not expend  additional  resources  to  develop  further  functionality  for this
product.  There can be no  assurance  that the product  will  generate  material
revenues in future periods.

     As a result of the  Company's  strategy  to focus on its  mobile  workforce
management   operations,   the  Company  is   currently   evaluating   strategic
alternatives with respect to its Hosting and IT Services  business.  The Company
currently expects to make a decision  regarding this business unit by the end of
the second quarter of 2002.


Disposition of Transportation Business Unit

     In February  1999,  the  Company's  Board of  Directors  approved a plan to
dispose  of the  delivery  segment  of its  business  ("Transportation  Business
Unit").  Effective  June  1,  1999,  the  Company  completed  the  sale  of  the
Transportation  Business  Unit to Digital  Dispatch  Systems,  Inc.  ("DDS"),  a
supplier of dispatch systems to the taxi market for proceeds of $3,805,746.  The
proceeds were comprised of common shares of DDS, representing an 11% interest in
DDS, and a promissory note in the principal  amount of $331,455  ($500,000 CDN),
due January 1, 2001,  bearing  interest  at 8% per annum.  During the year ended
December 31, 2000,  DDS exercised its option to buyback the DDS shares that MDSI
received  as  compensation  on the  sale of the  Transportation  Business  Unit.
Proceeds on sale of the DDS shares were $3,273,392. The note, with interest, was
paid in the first quarter of 2001.

     Under the terms of the  agreement  between the Company and DDS, the Company
retained  certain assets and  liabilities of the  discontinued  operations.  The
Company  liquidated  all  remaining  assets  and  liabilities  relating  to  the
Transportation Business Unit as of the second quarter of 2001.

     As a result of the Company's disposal of its Transportation  Business Unit,
the Transportation Business Unit has been classified as a discontinued operation
and the results of operation,  financial position and cash flow for this segment
have  been  segregated  from  those  of  continuing  operations.  The  following
discussion  and analysis of the  Company's  results of  operations  excludes the
Transportation Business Unit for the current and corresponding prior periods.


                                       13
<PAGE>
Recent Accounting Pronouncements

     In July 2001, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  No. 141 ("SFAS  141"),  "Business
Combinations."  SFAS 141 requires the purchase method of accounting for business
combinations    initiated    after   June   30,   2001   and    eliminates   the
pooling-of-interests method. The adoption of SFAS 141 did not have a significant
impact on its financial statements.

     In July 2001, the FASB issued Statement of Financial  Accounting  Standards
No. 142 ("SFAS 142"), "Goodwill and Other Intangible Assets", which is effective
January 1, 2002. SFAS 142 requires,  among other things,  the  discontinuance of
goodwill  amortization.  In addition,  the standard includes  provisions for the
reclassification  of  certain  existing  recognized   intangibles  as  goodwill,
reassessment   of  the  useful   lives  of  existing   recognized   intangibles,
reclassification  of certain intangibles out of previously reported goodwill and
the identification of reporting units for purposes of assessing potential future
impairments  of  goodwill.  SFAS 142 also  requires  the  Company to  complete a
transitional goodwill impairment test six months from the date of adoption.  The
adoption of SFAS 142 has not had a significant impact on the Company's financial
statements.

     In  October  2001,  the FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived Assets." This statement addresses financial
accounting  and reporting for the  impairment or disposal of long-lived  assets.
This statement supersedes FASB Statement No. 121, "Accounting for the Impairment
of  Long-Lived  Assets and for  Long-Lived  Assets to Be  Disposed  Of," and the
accounting  and  reporting  provisions  of APB  Opinion No. 30,  "Reporting  the
Results of  Operations  -  Reporting  the  Effects of Disposal of a Segment of a
Business,  and  Extraordinary,  Unusual and  Infrequently  Occurring  Events and
Transactions."  This  Statement also amends ARB No. 7,  "Consolidated  Financial
Statements,"  to eliminate the exception to  consolidation  for a subsidiary for
which  control  is likely to be  temporary.  This  Statement  requires  that one
accounting  model be used  for  long-lived  assets  to be  disposed  of by sale,
whether previously held and used or newly acquired. This Statement also broadens
the   presentation   of   discontinued   operations  to  include  more  disposal
transactions.  The  provisions  of this  standard  have been  adopted  as at the
beginning  of fiscal 2002 and have had no  significant  impact on the  Company's
financial statements.


Critical Accounting Policies and Significant Estimates

     The  significant  accounting  policies  are  outlined  within Note 1 to the
Financial  Statements of the Company's 10-K. Some of those  accounting  policies
require the Company to make  estimates and  assumptions  that affect the amounts
reported  by the  Company.  For the quarter  ended March 31, 2002 the  following
items require the most significant judgment and involve complex estimation:


Restructuring Charges

     As  part  of the  restructuring  charge,  $3.4  million  was  recorded  for
workforce  reduction.  In calculating the total charge, the Company was required
to estimate the timing and amounts to be paid to its  terminated  employees.  At
March 31, 2002,  the remaining  provision is $1.1 million as some employees have
been  informed  of  their  planned  termination,  but the  final  date is  still
uncertain,  the  actual  cost may be  materially  different  from the  Company's
estimates.

     In  calculating  the cost to dispose of excess  facilities  the Company was
required  to  estimate  for  each  location  the  amount  to be  paid  in  lease
termination payments,  the future lease and operating costs to be paid until the
lease is terminated, and the amount, if any, of sublease revenues. This required
estimating  the timing and costs of each lease to be  terminated,  the amount of
operating  costs,  and the timing and rate at which the Company might be able to
sublease the site.  From the estimates for these costs the Company  performed an
assessment  of  the  affected  facilities  and  considered  the  current  market
conditions  for each  site.  A  charge  of $1.9  million  was  recorded  for the
restructuring  of excess  facilities as part of the  restructuring  plan, and at
March  31,  2002  the  remaining  provision  is  $1.5  million.   The  Company's
assumptions  on either the lease  termination  payments,  operating  costs until
terminated,  or the  offsetting  sublease  revenues may be proven  incorrect and
actual cost may be materially different from the estimates.



                                       14
<PAGE>
Accounts Receivable

     The  Company  periodically  reviews  the  collectability  of  its  accounts
receivable  balances.  Where  significant  doubt  exists  with  regards  to  the
collection  of a certain  receivable  balance,  an  allowance  and charge to the
income  statement is recorded.  At March 31, 2002,  the  allowance  for doubtful
accounts was $3.9 million.  The Company intends to continue  vigorously pursuing
these accounts.  If future events indicate  additional  collection  issues,  the
Company may be required to record an additional allowance for doubtful accounts.

     In  addition,  the Company has  recorded  as long term  receivable  of $3.7
million related to a dispute with a customer.  The Company is currently involved
in  litigation  to collect the amounts  due. If the Company is  unsuccessful  in
collection of amounts due or if future events  indicate that a portion or all of
the amounts due may not be collected,  a provision against the receivable may be
required. See "Forward-Looking Statements."


Revenue Recognition - Percentage Completion

     The Company  uses  estimates  based on inputs to determine  the  percentage
completion of its contracts and thus its revenue  recognition.  These  estimates
and contracts are reviewed regularly and are adjusted to meet the Company's best
estimate at the time. The Company's assumptions used to form these estimates may
be proven to be erroneous and materially different outcomes may result.


Income Taxes

     The Company has incurred losses and other costs that can be applied against
future taxable  earnings to reduce the tax liability on those  earnings.  As the
Company  is  uncertain  of  realizing  the future  benefit  of those  losses and
expenditures,  the  Company  has  recorded a valuation  allowance  against  most
non-capital  loss carry  forwards,  and other  deferred tax assets  arising from
differences  in tax and  accounting  bases.  Actual  results  may be  materially
different from the current estimate.





                                       15
<PAGE>

Results of Operations

     The  Company's  net loss was $0.3  million for the three months ended March
31, 2002. This compares to a net loss of $6.2 million for the three months ended
March 31, 2001. The change in income for the period is due primarily to a number
of one time  charges  incurred  during the three  months  ended  March 31,  2001
relating  to  the  provision  for  doubtful  accounts,   restructuring  charges,
impairment of goodwill and valuation allowance on investments.

     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>
                                                                        Three months ended March 31,
                                                                        ----------------------------
                                                                            2002            2001
                                                                        ------------     -----------
     <S>                                                                  <C>              <C>
     REVENUE
        Software and services                                                 51.7%            53.7%
        Hosting & information technology services                             21.9%            25.7%
        Maintenance and support                                               22.7%            14.0%
        Third party products and services                                      3.7%             6.6%
                                                                        ------------     -----------
                                                                             100.0%           100.0%

     DIRECT COSTS                                                             50.7%            55.9%
                                                                        ------------     -----------
     GROSS PROFIT                                                             49.3%            44.1%
                                                                        ------------     -----------
     OPERATING EXPENSES
        Research and development                                              13.0%            14.5%
        Sales and marketing                                                   24.4%            19.8%
        General and administrative                                            16.0%             9.7%
        Restructuring charge                                                     -%             6.9%
        Provision for doubtful accounts                                          -%             6.9%
        Amortization and provision for valuation of intangible assets            -%             9.4%
                                                                        ------------     -----------
                                                                              53.4%            67.2%
                                                                        ------------     -----------
     OPERATING LOSS                                                          (4.1)%          (23.1)%

     VALUATION ALLOWANCE ON INVESTMENTS                                          -%          (15.7%)
     OTHER INCOME (EXPENSE)                                                    0.5%           (0.3%)
                                                                        ------------     -----------
     LOSS BEFORE TAX PROVISION                                               (3.6)%          (39.1)%

     RECOVERY OF INCOME TAXES                                                  1.1%             4.0%
                                                                        ------------     -----------
     NET LOSS                                                                (2.5)%          (35.1)%
                                                                        ============     ============
</TABLE>


Three Months Ended March 31, 2002 Compared to the Three Months
Ended March 31, 2001


     Revenue.  Revenue  decreased by $6.3  million  (35.8%) for the three months
ended March 31, 2002 as compared to the three months ended March 31, 2001.  This
decrease was  primarily  due to decreases in revenue from  software and services
and hosting and IT services,  during the first  quarter of 2002  relative to the
same period in 2001.



                                       16
<PAGE>

Three Months Ended March 31, 2002 Compared to the Three Months
Ended March 31, 2001 (continued)

     Software and  services  revenue  decreased by $3.6 million  (38.2%) for the
three  months  ended March 31, 2002 as compared to the three  months ended March
31, 2001.  The Company  believes its software and service  revenue was adversely
impacted  by an  increase  in time  taken for the  decision  making  cycle,  and
reduction of capital  expenditures  by  customers.  This delay and  reduction in
expenditure  has caused  fewer  contracts  to be worked on by the Company in the
three  months  ended March 31, 2002 as compared to the three  months ended March
31,  2001 and as a result  has  caused  a  reduction  in  revenue.  The  Company
anticipates that continued economic  uncertainty in the  telecommunications  and
utility markets will continue to have an adverse impact on software and services
revenues in future periods. See "Forward-Looking Statements".

     Hosting and IT services (formerly e-Business) revenue primarily consists of
sales by the  Company's  subsidiary,  Connectria.  Revenue for the three  months
ended March 31, 2002 was $2.5  million as compared to $4.5 million for the three
months  ended March 31,  2001.  Hosting and IT services  revenue in both periods
consisted  primarily of revenues from consulting and hosting  services.  Hosting
and IT services revenue is dependent on a small number of significant contracts,
and as a result  large  fluctuations  in revenue  occur as a result of a gain or
loss of a small  number of  contracts.  During the three  months ended March 31,
2002 one significant contract accounted for approximately 47.1% of total hosting
and IT services  revenue as compared to 53.3% of hosting and IT services revenue
in the three months  ended March 31, 2001.  As the total dollar value of revenue
earned under this  contract  decreased for the three months ended March 31, 2002
as  compared to the three  months  ended March 31,  2001,  total  hosting and IT
services  revenue has decreased  during the three months ended March 31, 2002 as
compared to the three months ended March 31, 2001.

     Maintenance  and support  revenues  were $2.6  million for the three months
ended  March 31, 2002 as compared  to $2.5  million for the three  months  ended
March 31, 2001.  Maintenance and support revenue has increased  primarily due to
the growth in the Company's installed customer base. Such revenue is expected to
fluctuate as it  corresponds  to the level of software  and  services  which the
Company is engaged to provide in support of its installations.

     Third party products and services revenue decreased by $0.7 million (63.8%)
for the three  months ended March 31, 2002 as compared to the three months ended
March 31, 2001.  These third party  products  typically  include  host  computer
equipment and mobile computing devices, delivered as part of the installation of
software  and  provision of services.  Revenue  from  deliveries  of third party
products and services will  fluctuate from period to period given the timing and
nature of certain  contracts  and the rollout  schedules  which are  established
primarily  by the  customers.  In addition,  not all  customers  under  contract
require the provision of third party products and services.  Accordingly,  there
may be large  fluctuations  in revenue,  direct costs,  gross profits and income
from operations from one period to another.

     Direct Costs. Direct costs were 50.7% of revenue for the three months ended
March 31, 2002 as compared to 55.9% for the three  months  ended March 31, 2001.
Direct  costs  include  labor and other  costs  directly  related  to a project,
including the provision of services and support, production 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 decrease in
direct costs as a percentage  of revenue  occurred as the Company  increased its
efficiency  due to its  restructuring,  and as a result of increased  experience
with Advantex r7 installations.  There was also a change in the mix of revenues.
A greater  proportion of revenue was generated from the Company's  higher margin
"Field  Service"  segment and a lesser  proportion of revenue was generated from
the Company's lower margin "Hosting and IT Services"  segment.  As a result, the
percentage of direct costs compared to revenues for the three months ended March
31, 2002 decreased as compared to the three months ended March 31, 2001.

     Gross  Margins.  Gross  margins  were 49.3% of revenue for the three months
ended March 31, 2002 as compared to 44.1% for the three  months  ended March 31,
2001. The increase in gross margin as a percentage of revenue relates  primarily
to the  change in the mix of  revenues  and to  increased  efficiencies  for the
installations  of Advantex  r7.  These  factors  resulted in a increase in gross
margin as a  percentage  of revenue  for the three  months  ended March 31, 2002
compared to the three months ended March 31, 2001. The Company  expects that the
current  restructuring will enable the Company to maintain, on a relative basis,
stable gross margins in the near future. See "Forward-Looking Statements".


                                       17
<PAGE>

Three Months Ended March 31, 2002 Compared to the Three Months
Ended March 31, 2001 (continued)

     Research and Development.  Research and development  expenses were 13.0% of
revenue for the three  months  ended March 31, 2002 and 14.5% of revenue for the
three months ended March 31, 2001.  Total research and development  expenditures
for the three months ended March 31, 2002 of $1.5 million  represents a decrease
of $1.1 million  (42.6%) as compared to the same period in 2001. The decrease in
research and  development  expenses in 2002 is a result of the completion of the
Advantex version r7 development project during the first quarter of 2001 and the
elimination of research and  development  expenditures  related to its e-Service
manager product which was discontinued in 2001. As a result, the Company did not
expend as many  resources on research and  development  in 2002 as in 2001.  The
Company  intends to continue  committing  a  significant  portion of its product
revenues  to  enhance   existing   products  and  develop  new   products.   See
"Forward-Looking Statements".

     Sales and Marketing. Sales and marketing expenses were 24.4% of revenue for
the three  months ended March 31, 2002 and 19.8% of revenue for the three months
ended March 31, 2001. This represents a decrease of $717,000 (20.7%) as compared
to the same  period in 2001.  The  decrease  was  primarily  due to  controls on
spending  initiated  during 2001 in  conjunction  with the Company's  previously
announced restructuring program. The Company anticipates that the dollar amounts
of its sales and marketing  expenses will continue to be significant as a result
of the Company's  commitment to its international  marketing efforts and attempt
to  penetrate   additional  markets  for  its  products.   See  "Forward-Looking
Statements".

     General and Administrative.  General and administrative expenses were 16.0%
of revenue for the three months ended March 31, 2002 and 9.7% of revenue for the
three months ended March 31, 2001. Total general and administrative  expenses of
$1.8 million  represents a increase of $97,000 (5.7%) for the three months ended
March  31,  2002  as   compared  to  the  same  period  in  2001.   General  and
administrative   expenses  remained  relatively  consistent  during  comparative
periods as a result of a cost control effort  initiated by the Company which has
been offset by one time severance costs expensed during the period.  The Company
expects that in the near future,  general and  administrative  expenditures will
remain  relatively   consistent  with  current  levels.   See   "Forward-Looking
Statements".

     Restructuring  Charge. No charges for  restructuring  were taken during the
three months ended March 31, 2002.  During the three months ended March 31, 2001
the  Company  announced  a  restructuring,   designed  to  increase  operational
efficiencies  and  reduce  costs.  As part  of the  restructuring,  the  Company
recorded a provision  of $1.2  million for the three months ended March 31, 2001
relating to severance and the subleasing of excess office space. In May of 2001,
the Company  announced  it intended  to take a further  restructuring  charge of
approximately  $4.9  million in the second  quarter  of 2001  relating  to staff
reductions  and  leasing of excess  space that were not  included in the initial
restructuring announcement.

     Provision  for doubtful  accounts.  No charges for doubtful  accounts  were
taken  during the three  months  ended March 31,  2002.  During the three months
ended  March  31,  2001 the  Company  recorded  a charge  of $1.2  million  as a
provision against several trade accounts receivable balances. Due to significant
uncertainty surrounding collection of several specific accounts the Company took
a charge to value the accounts at the most likely amount to be  collected.  This
provision  arose  due to the  increased  economic  uncertainty  in the  vertical
industries the Company services.

     Amortization  of  Intangible   Assets.   No  charges  for  amortization  of
intangible  assets were taken during the three  months ended March 31, 2002,  as
the Company has taken a provision for valuation  equal to the remaining value of
intangible  assets  during the year ended  December 31, 2001.  Amortization  and
impairment  charges for  intangible  assets for the three months ended March 31,
2001 were $1.6  million.  The  charge  was a result  of a  determination  by the
Company  that  an  impairment  in the  value  of the  Goodwill  acquired  on the
acquisition of Alliance  Systems Inc. had occurred during the three months ended
March 31, 2001.  The Company  determined an impairment  had occurred due to poor
historical and forecasted performance in the acquired company's business, and as
a result the Company wrote off the remaining  Goodwill of $1.6 million  relating
to the acquisition of Alliance  Systems Inc. during the three months ended March
31, 2001.

     Valuation  Allowance on  Investments.  No charge was recorded for valuation
allowance on  investments  during the three  months  ended March 31, 2002,  as a
valuation  allowance  equal  to the  remaining  book  value of  investments  was
recorded during the three months ended March 31, 2001. As part of its e-Business
strategy the Company invested in or advanced funds to three private companies in
2000. As a result of significant  uncertainty over the future realization of any
return on  investment  or capital,  the Company  recorded a valuation  allowance
equal to the full cost of the  investments  during the three  months ended March
31, 2001.



                                       18
<PAGE>

     Other Income (Expense). Other income was $60,000 for the three months ended
March 31, 2002 as compared to  $(60,000)  for the three  months  ended March 31,
2001. Substantially all of other income (expense) relates to fluctuations in the
currencies  of the Company's  foreign  operations,  interest  income on cash and
short term deposits,  and interest  expense on short-term  borrowings  under the
line of credit and capital lease obligations.

     Income Taxes.  The Company provided for income tax recoveries on losses for
the three  months  ended  March 31,  2002 at the rate of  31.0%.  The  Company's
effective  tax rate  reflects  the  blended  effect of  Canadian,  US, 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,  private  placements  and public
offerings of its  securities.  At March 31, 2002,  the Company had cash and cash
equivalents of $13.4 million and working capital of $12.8 million.

     Cash  provided by (used in) operating  activities  was $0.5 million for the
three  months  ended  March 31, 2002  compared  to ($0.5)  million for the three
months ended March 31, 2001. The net inflow of cash from  operating  activities,
after adding back  depreciation and amortization of $0.9 million is due to a net
increase in non-cash  working  capital  items of $0.1  million and a net loss of
$0.3 for the three months  ending  March 31, 2002.  The net increase in non-cash
operating  working  capital items is due primarily to a net increase in unbilled
trade  receivables,  a decrease in trade  receivables and a decrease in accounts
payable and  accruals.  The  increase in unbilled  trade  receivables  is due to
timing differences arising between revenue recognition and billing milestones in
multiphase projects.  The decrease in trade receivables is a result of increased
collections  during the three  months  ended  March 31,  2002.  The  decrease in
accounts  payable  and  accruals  resulted  from  ordinary  fluctuations  in the
Company's   business,   and  from  the  payments  made  on  account  of  certain
restructuring accruals recorded during 2001.

     The Company  recorded as at March 31, 2002 a provision of $3.9 million with
respect  to  doubtful  accounts.   The  Company  intends  to  vigorously  pursue
collection of these accounts;  however, due to uncertainty with regards to these
customers' financial conditions, the Company determined that it would be prudent
to record an allowance to address this uncertainty.

     The Company is currently  involved in a dispute  with a customer,  and as a
result has reclassified $3.7 million in accounts  receivable as long term as the
Company  determined it is not likely to collect the amounts within one year. The
Company is  currently  involved in  litigation  to collect the amounts  due. The
Company  believes  that its  position  in the  matter is strong  and  intends to
vigorously  pursue  collection,  but  due to  uncertainty  regarding  timing  of
collection  has elected to classify the  receivable as long term. If the Company
is  unsuccessful  in  collection  of amounts  due,  or is made to refund  monies
previously  collected  under the contract,  the Company's  liquidity and working
capital would be adversely affected.

     Cash used by financing activities of $425,000 during the three months ended
March 31, 2002  primarily  relates to $637,000 in repayments  of capital  leases
made during the  quarter,  partially  offset by  proceeds  of $212,000  from the
issuance of shares under the employee  share  purchase  plan. The capital leases
are to be repaid  evenly over a 36 month period ending  December 22, 2003,  bear
interest at 7.675% and are secured by certain  computer  hardware  and  software
assets of the Company.

     Cash used in  investing  activities  was $0.3  million for the three months
ended  March 31, 2002 as compared  to $1.0  million for the three  months  ended
March 31, 2001. Total investing activity during the three months ended March 31,
2002  consisted  of, $0.3 million in purchases of capital  assets.  Purchases of
capital assets include computer  hardware and software for use in implementation
activities and to support the growth of the Hosting and IT services  operations.
Investing  activities in 2001 related  primarily to purchases of capital assets,
offset by proceeds on settlement of the note  receivable and proceeds on sale of
investments.

     Existing  sources of liquidity at March 31, 2002 included  $13.4 million of
cash and cash equivalents and funds available under the Company's operating line
of credit. As at March 31, 2002, the Company's borrowing capacity under the line
of credit was $10 CDN million. Under the terms of the agreement,  borrowings and
letters of credit under the line are limited to 75% to 90% of eligible  accounts
receivable.  Borrowings  accrue  interest at the bank's prime rate plus 0.5%. At
March 31, 2002, the Company was not using this line of credit.


                                       19
<PAGE>

     The  Company  believes  that  the  principal  source  of its  liquidity  is
operating cash flow. Certain  circumstances  including a reduction in the demand
for the Company's products, an increase in the length of the sales cycle for the
Company's  products,  an increase in  operating  costs,  unfavorable  results of
litigation,  or general  economic  slowdowns could have a material impact on the
Company's   operating   cash  flow  and   liquidity.   See   Exhibit   99.1  and
"Forward-Looking Statements".

     The  Company  believes  that  future  cash  flows from  operations  and its
borrowing capacity under the operating line of credit combined with current cash
balances will provide  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.  The Company has no material
additional commitments other than capital and 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.

     In addition to these commercial  commitments the Company has also provided,
as performance bonds, an irrevocable revolving letter of credit in the amount of
EUR 751,623 ($665,801) expiring May 31, 2003, and an additional letter of credit
in the amount of EUR 75,855  ($66,752)  expiring  February 28, 2003. The Company
has pledged an amount equal to the letters of credit and  guarantee  against its
operating line of credit as security.


Derivative Financial Instruments

     The  Company  generates  a  significant  portion  of  sales  from  sales to
customers  located outside the United States,  principally in Canada and Europe.
Canadian sales are made mostly by the Company and on occasion are denominated in
Canadian dollars. International sales are made mostly from a foreign subsidy and
are  typically  denominated  in either  U.S.  dollars  or Euros.  The  Company's
international  business is subject to risks typical of an international business
including,  but not  limited  to:  differing  economic  conditions,  changes  in
political climate, differing tax structures, other regulations and restrictions,
and foreign exchange rate volatility.  Accordingly, the Company's future results
could be materially adversely impacted by changes in these or other factors. The
Company may enter into foreign exchange  forward  contracts to offset the impact
of  currency   fluctuations  on  certain   nonfunctional   currency  assets  and
liabilities,  primarily  denominated  in the Canadian  dollar,  Euro and British
pound. The foreign exchange forward  contracts the Company enters into generally
have original maturities ranging from three to eighteen months. The Company does
not enter into foreign exchange forward contracts for trading purposes, and does
not expect gains or losses on these  contracts to have a material  impact on the
Company's financial results.

     The Company's  foreign currency forward  contracts are executed with credit
worthy banks and are denominated in currencies of major industrial countries. As
at  March  31,  2002 the  Company  had no  foreign  currency  forward  contracts
outstanding.







                                       20
<PAGE>

ITEM 3:  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's  primary market risk is foreign currency  exchange rates. The
Company has  established  procedures to manage  sensitivity to foreign  currency
exchange  rate market  risk.  These  procedures  include the  monitoring  of the
Company's net exposure to each foreign  currency and the use of foreign currency
forward contracts to hedge firm exposures to currencies other than United States
dollars.  The  Company  has  operations  in Canada and Europe in addition to its
United States  operations and did not hedge these exposures during the quarterly
period ended March 31, 2002.  However,  the Company may from time-to-time  hedge
any net exposure to currencies other than the United States dollar.

     As of March 31, 2002,  the  potential  reduction in future  earnings from a
hypothetical  instantaneous 10% change in quoted foreign currency exchange rates
applied  to the  foreign  currency  sensitive  contracts  and  assets  would  be
approximately $3.4 million. The foreign currency sensitivity model is limited by
the  assumption  that all foreign  currencies,  to which the Company is exposed,
would  simultaneously  change by 10%. Such synchronized  changes are unlikely to
occur. The sensitivity model does not include the inherent risks associated with
anticipated  future  transactions  denominated  in foreign  currencies or future
forward contracts entered into for hedging purposes.





                                       21
<PAGE>

Part II -  OTHER INFORMATION

     ITEM 1. LEGAL PROCEEDINGS

     MDSI Mobile Data Solutions Inc. v. Citizens  Telecom Services Co., L.L.C. -
U.S. District Court,  Texas District Court Collin County - 366 Judicial District
(Docket No. 366-01914-00).

     On November 22, 2000, MDSI filed suit in Texas District Court Collin County
against Citizens Telecom Services Co., L.L.C.,  generally alleging that Citizens
breached a series of contracts  dated  October 15,  1998.  The suit alleges that
Citizens has  wrongfully  terminated the contracts and failed to pay sums due of
approximately  $3.7 million.  The suit seeks  damages,  interest and  attorneys'
fees. In late February 2001, Citizens filed an answer and counter claim alleging
that MDSI  breached  the  contracts,  justifying  Citizens'  termination  of the
contracts  and  entitling  Citizens  to  repayment  of all sums  paid to MDSI of
approximately  $3.5  million in addition to interest  and  attorneys'  fees.  At
Citizens'  request the parties held a mediation on April 2, 2001.  Mediation was
not successful and both parties have begun  discovery.  MDSI disputes  Citizens'
claims and intends to pursue the lawsuit vigorously.

     From time to time, the Company is a party to litigation and claims incident
to the ordinary  course of its  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, operating results and cash flows.

     For Items 2, 3, 4 and 5 there was no reportable  information  for the three
months ended March 31, 2002.

     ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

      Exhibit
      Number        Description
      ------        -----------
       2.1(3)       Agreement  and Plan of Merger dated April 17, 1997 among the
                    Company, MDSI Acquisition Corp., Alliance, Geoffrey Engerman
                    and Doug Engerman

       3.1(1)       Articles of Incorporation of the Company

       3.2(1)       Articles of Amendments of the Company

       3.3(1)       By-laws of the Company

       4.1(1)       Form of Common Share Certificate

      10.1(1)(2)    1996 Stock Option Plan

      10.2(2)(4)    1997 Stock Option Plan

      10.3(2)(4)    1998 Stock Option Plan

      10.4(2)(5)    2000 Stock Purchase Plan

      10.5(2)(5)    1999 Stock Option Plan

      10.6(2)(6)    1998 Stock Option Plan for Connectria Corporation (formerly,
                    Catalyst Solutions Group, Inc.)

      10.7(2)(7)    2000 Stock Option Plan


                                       22
<PAGE>

      Exhibit
      Number        Description
      ------        -----------
      10.8(1)       Form of  Indemnification  Agreement  between the Company and
                    certain officers of the Company

      10.9(1)(2)    Employment Agreement dated April 1, 1996 between the Company
                    and Erik Dysthe

      10.10(1)      Lease dated  September  25, 1997 between Sun Life  Assurance
                    Company of Canada and the Company

      10.11(1)      Lease dated April 8, 1993 between Cambridge Scanning Company
                    Limited and Spectronics Micro Systems Limited

      10.12(5)      Master  Purchase  and  Sale  Agreement  dated  June 1,  1999
                    between  Digital  Dispatch  Systems  Inc.  and  the  Company
                    (without schedules or exhibits)*

      10.13(8)      Agreement  and  Plan of  Reorganization,  dated as of May 9,
                    2000, among MDSI, MDSI Acquisition  Corporation,  Connectria
                    and Certain Principal Shareholders*

      10.14(8)      Form of Voting,  Lockup and  Registration  Rights  Agreement
                    among MDSI,  MDSI  Acquisition  Corporation,  Connectria and
                    Certain Principal Shareholders

      10.15(2)(9)   Employment  Agreement  dated  March  26,  2001  between  the
                    Company and Erik Dysthe

      10.16(2)(9)   Employment  Agreement  dated  April  24,  2001  between  the
                    Company and Gerald F. Chew

      10.17(2)(9)   Employment  Agreement  dated May 7, 2001 between the Company
                    and Peter H. Rankin

      10.18(10)     Lease  dated  October  12, 2001  between  Crown  Diversified
                    Industries   Corporation   and   Connectria   Corporation  a
                    subsidiary of the Company

      10.19(10)     Lease  dated  May  14,  1999   between   California   Public
                    Employees'  Retirement System and Mobile Data Solutions Inc.
                    a subsidiary of the Company

      10.20(10)     Amending  Agreement  dated December 1, 1998 between Sun Life
                    Assurance Company of Canada and the Company

      10.21(2)(10)  Employment  Agreement  dated May 9, 2001 between the Company
                    and Richard S. Waidmann

      10.22(2)(10)  Employment  Agreement  dated May 9, 2001 between the Company
                    and Eric Y. Miller

      10.23(2)      Employment  Agreement  dated  January  2, 2002  between  the
                    Company and Verne Pecho

      99.1          Risk Factors

     --------------------
     (1)  Previously filed as exhibits with the same  corresponding  number with
          the Registrants'  Registration Statement on Form F-1 (Registration No.
          J33-5872)  and  amendments  numbers 1 and 2  thereto,  filed  with the
          Securities and Exchange  Commission on October 28, 1996,  November 13,
          1996 and November 25, 1996, respectively.
     (2)  This  document  has  been  identified  as  a  management  contract  or
          compensatory plan or arrangement.
     (3)  Previously filed as an exhibit to Registrant's  Registration Statement
          on Form F-4.
     (4)  Previously filed as exhibits with the same  corresponding  number with
          the Registrant's Form 10-K for the year ended December 31, 1998.
     (5)  Previously filed as exhibits with the same  corresponding  number with
          the Registrant's Form 10-K for the year ended December 31, 1999.
     (6)  Previously  filed  as  exhibits  with  the  Registrant's  Registration
          Statement on Form S-8 filed on July 12, 2000.
     (7)  Previously  filed  as  exhibits  with  the  Registrant's  Registration
          Statement on Form S-8 filed on November 22, 2000.
     (8)  Previously filed as exhibits with the  Registrant's  Current Report on
          Form 8-K filed on June 15, 2000.
     (9)  Previously filed as exhibits with the  Registrant's  Form 10-Q for the
          quarterly period ended September 30, 2001.
     (10) Previously filed as exhibits with the  Registrant's  Form 10-K for the
          year ended December 31, 2001.

     *    The  Company  agrees to  supplementally  furnish a copy of any omitted
          schedule or exhibit to the  Securities  and Exchange  Commission  upon
          request.

     (b)  Reports on Form 8-K

     No reports on Form 8-K were filed during the three month period ended March
31, 2002.


                                       23
<PAGE>


                                   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:  May 14, 2002           By: /s/ Erik Dysthe
                                  ---------------------------------------------
                                  Name:  Erik Dysthe
                                  Title: President, Chief Executive Officer,
                                         Chairman of the Board and Director




Date:  May 14, 2002           By: /s/ Verne D. Pecho
                                  ---------------------------------------------
                                  Name:  Verne D. Pecho
                                  Title: Vice President Finance & Administration
                                         and Chief Financial Officer
                                         (Principal Financial and Accounting
                                         Officer)






                                       24