================================================================================
                       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, 2000

                                       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 March 31, 1999 was 7,680,797.

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

<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                             INDEX TO THE FORM 10-Q
                  For the quarterly period ended March 31, 2000


<TABLE>
                                                                                                           Page
                                                                                                           ----
<S>                                                                                                         <C>
Part I -  FINANCIAL INFORMATION

          ITEM 1. FINANCIAL STATEMENTS

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

                  Consolidated Statements of Operations and Deficit..........................................4

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

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

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

         ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.................................16

Part II - OTHER INFORMATION

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

         ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.................................................17

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

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

         ITEM 5.  OTHER INFORMATION.........................................................................17

         ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K..........................................................17


SIGNATURES .................................................................................................18

</TABLE>



<PAGE>

Part I -  FINANCIAL INFORMATION

          ITEM 1. FINANCIAL STATEMENTS

                         MDSI MOBILE DATA SOLUTIONS INC.

                           Consolidated Balance Sheets
                      (Expressed in United States dollars)
                                   (Unaudited)

<TABLE>
                                                                                               As at
                                                                            ---------------------------------------
                                                                                  March 31,           December 31,
                                                                                    2000                 1999
                                                                            ------------------     ----------------
<S>                                                                               <C>                 <C>
Assets

Current assets
     Cash and cash equivalents........................................            $16,707,829         $  14,750,040
     Accounts receivable, net
        Trade.........................................................              9,556,909            13,151,828
        Unbilled......................................................             10,080,135             5,595,902
     Prepaid expenses ................................................              1,854,575             1,117,380
     Deferred income taxes............................................                577,427               577,427
     Current portion of lease receivable..............................                392,207               386,861
                                                                            ------------------     ----------------
                                                                                   39,169,082            35,579,438
Lease receivable....................................................                   33,645               133,723
Investments.........................................................                4,884,221             4,140,457
Capital assets, net.................................................                7,212,113             6,386,647
Intangible assets, net..............................................                1,828,494             1,907,297
                                                                            ------------------     ----------------
                                                                                   53,127,555            48,147,562
Assets of discontinued operations (note 4)..........................                1,436,819               960,610
                                                                            ------------------     ----------------
Total assets.......................................................              $ 54,564,374          $ 49,108,172
                                                                            ==================     ================

Liabilities and stockholders' equity

Current liabilities
     Accounts payable ................................................            $ 1,522,996          $  1,571,143
     Accrued liabilities .............................................              2,956,369             2,466,095
     Income Taxes Payable ............................................              1,668,684             1,567,671
     Deferred revenue.................................................              6,341,576             4,724,850
     Current obligations under capital leases ........................              1,299,639             1,176,957
                                                                         ---------------------   -------------------
                                                                                   13,789,264            11,506,716
Obligations under capital leases.....................................               1,942,630             2,422,525
Liabilities of discontinued operations (note 4) .....................                 440,226               173,424
                                                                         ---------------------   -------------------
Total liabilities....................................................              16,172,120            14,102,665
                                                                         ---------------------   -------------------
Stockholders' equity

     Common stock.....................................................             47,849,178            44,814,259
     Treasury stock...................................................               (85,043)              (85,043)
     Deficit..........................................................            (8,681,777)           (9,294,272)
     Accumulated comprehensive income (loss) (note 1a)................              (690,104)             (429,437)
                                                                         ---------------------   -------------------
                                                                                   38,392,254            35,005,507
                                                                         ---------------------   -------------------
Total liabilities and stockholders' equity...........................            $ 54,564,374          $ 49,108,172
                                                                         =====================   ===================

</TABLE>

                 See notes to consolidated financial statements



                                      -3-
<PAGE>


                         MDSI MOBILE DATA SOLUTIONS INC.

                Consolidated Statements of Operations and Deficit
                      (Expressed in United States dollars)
                                   (Unaudited)

<TABLE>
                                                                                   Three months ended March 31,
                                                                            ----------------------------------------
                                                                                      2000                  1999
                                                                            ------------------     -----------------
<S>                                                                                <C>                  <C>
Revenue
   Software and services..............................................             $ 9,669,190          $  8,748,341
   Third party products and services..................................                 497,696             2,703,647
   Maintenance and support............................................               2,024,346             1,008,522
                                                                            ------------------     -----------------
                                                                                    12,191,232            12,460,510

Direct cost...........................................................               4,588,533             5,814,621
                                                                            ------------------     -----------------
Gross profit..........................................................               7,602,699             6,645,889
                                                                            ------------------     -----------------
Operating expenses
   Research and development...........................................               1,938,706             1,614,204
   Sales and marketing................................................               2,750,406             2,567,317
   General and administrative.........................................               1,728,217             1,347,595
   Amortization of intangible assets..................................                  69,810                69,810
                                                                            ------------------     -----------------
                                                                                     6,487,139             5,598,926
                                                                            ------------------     -----------------
Operating income......................................................               1,115,560             1,046,963
Other income (expense)................................................               (212,365)             (162,395)
                                                                            ------------------     -----------------
Income before tax provision...........................................                 903,195               884,568
Provision for income taxes............................................               (290,700)             (284,110)
                                                                            ------------------     -----------------
Net income from continuing operations.................................                 612,495               600,458
Loss from discontinued operations (note 4)............................                       -            (3,872,683)
                                                                            ------------------     -----------------
Net income (loss).....................................................                 612,495           (3,272,225)
Deficit, beginning of period..........................................             (9,294,272)          (10,298,621)
                                                                            ------------------     -----------------
Deficit, end of period................................................            $(8,681,777)         $(13,570,846)
                                                                            ==================     =================
Earnings per Common Share
Earnings (loss) from continuing operations
  Basic...............................................................              $     0.08            $     0.09
                                                                            ==================     =================
  Diluted.............................................................              $     0.07            $     0.08
                                                                            ==================     =================
Net earnings (loss)
  Basic...............................................................              $     0.08          $     (0.47)
                                                                            ==================     =================
  Diluted.............................................................              $     0.07          $     (0.47)
                                                                            ==================     =================
Weighted average Common Shares outstanding
  Basic...............................................................               7,546,446             7,021,007
                                                                            ==================     =================
  Diluted.............................................................               8,909,158             7,628,799
                                                                            ==================     =================
</TABLE>

                 See notes to consolidated financial statements



                                      -4-



<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                      Consolidated Statements of Cash Flows
                      (Expressed in United States dollars)
                                   (Unaudited)


<TABLE>
                                                                                  Three months ended March 31,
                                                                               ----------------------------------
                                                                                      2000                1999
                                                                               ----------------     -------------
<S>                                                                             <C>                  <C>
Cash flow from operating activities
     Net income from continuing operations............................            $   612,495         $  600,458
     Items not affecting cash:
          Depreciation and amortization...............................                491,632            373,305
          Deferred income taxes.......................................                      -             56,591
          Changes in non-cash operating working capital items.........                543,604         (1,342,469)
                                                                               ----------------     -------------
     Net cash provided by (used in) operating activities..............              1,647,731           (312,115)
                                                                               ----------------     -------------

Cash flows from financing activities
     Issuance of common stock.........................................              3,034,919         10,717,137
     Repayment of long-term debt......................................                      -           (197,492)
     Proceeds from capital leases.....................................              (357,213)            686,524
                                                                               ----------------     -------------
     Net cash provided by financing activities........................              2,677,706         11,206,169
                                                                               ----------------     -------------
Cash flows from investing activities
     Long term lease receivable.......................................                 94,733            119,240
     Acquisition of investments.......................................              (743,764)                  -
     Acquisition of capital assets....................................            (1,248,543)           (755,073)
                                                                               ----------------     -------------
Net cash used in investing activities............................                 (1,897,574)           (635,833)
                                                                               ----------------     -------------
Cash provided by continuing operations...............................               2,427,863         10,258,221
Cash provided by (used for) discontinued operations (note 4).........               (209,407)            796,514
                                                                               ----------------     -------------
Net cash inflow......................................................               2,218,456         11,054,735
Effects of foreign exchange fluctuations on cash.....................               (260,667)            349,648
Cash and cash equivalents, beginning of period......................               14,750,040          3,995,775
                                                                               ----------------     -------------
Cash and cash equivalents, end of period............................            $  16,707,829       $ 15,400,158
                                                                               ================     =============
</TABLE>


                 See notes to consolidated financial statements



                                      -5-


<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                    For the three months ended March 31, 2000
                      (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 Company's Annual Report filed on
          Form 10-K for the year ended December 31, 1999.

          For purposes of these consolidated  financial statements,  the Company
          has adopted the U.S. dollar as the reporting  currency.  This improves
          investors' ability to compare the Company's results with those of most
          other publicly traded businesses in the industry.  These  consolidated
          financial  statements 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 in  accumulated  comprehensive
          income (loss).

          Comprehensive Income for the period can be summarized as follows:


                                                    Three months ended March 31,
                                                    ---------------------------
                                                        2000            1999
                                                    ------------    -----------
          Net income from continuing operations     $  612,495       $ 600,458

          Comprehensive items
           - Translation adjustment                   (260,667)        349,647
                                                    ------------    -----------
          Comprehensive income for the period       $  351,828       $ 950,105
                                                    ============    ===========

     (b)  Use of estimates

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





                                      -6-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                    For the three months ended March 31, 2000
                      (Expressed in United States dollars)
                                   (Unaudited)


2.   SEGMENTED INFORMATION

     Segmented information

     The Company  develops,  markets and supports  mobile work force  management
     systems serving the needs of industry and government.  Examples include the
     utility, telecommunications/cable and public safety industries. At December
     31, 1999, the Company reported only one business  segments - Field Service.
     On  February 1, 2000,  the Company  announced  its  intentions  to sell its
     products  of  mobile   workforce   management  and  wireless   connectivity
     application   software   over  the  internet   from  a   wirelessly-enabled
     Applications  Service  Provider  ("ASP) site. As a result of that decision,
     the Company now has two business segments.

     Business Segments

<TABLE>
                                                    Three months ended March 31, 2000
                                                    ---------------------------------
                                              Field
                                             Service         e-Business           Total
        -------------------------------------------------------------------------------------
          <S>                           <C>                 <C>              <C>
          Revenue                        $ 12,191,232        $       -        $ 12,191,232

          Operating earnings                1,628,829         (513,269)          1,115,560

          Depreciation & Amortization         491,632                -             491,632

          Long Lived Assets                13,958,473                -          13,958,473

          Capital Expenditures              1,248,543                -           1,248,543
</TABLE>


     Geographic information

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

                                             Three months ended March 31,
                                       -----------------------------------------
                                              2000                  1999
                                       --------------------  -------------------

           Canada....................        $     236,307        $     752,058
           United States.............           10,563,287            9,382,224
           Europe....................            1,370,251            1,901,635
           Asia......................               21,387              424,593
                                       --------------------  -------------------
                                             $  12,191,232        $  12,460,510
                                       ====================  ===================




                                      -7-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                    For the three months ended March 31, 2000
                      (Expressed in United States dollars)
                                   (Unaudited)


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 was 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
     earnings (loss) per common share calculations for the periods indicated:

<TABLE>
                                                                Three months ended
                                                                     March 31,
                                                         -------------------------------
                                                              2000              1999
                                                         -------------     -------------
<S>                                                        <C>                <C>
        Weighted average shares outstanding......          7,546,446          7,021,007
        Common stock equivalents

             Stock options.......................          1,362,711            607,792
                                                         -------------     -------------
       Total shares for diluted earnings (loss)..          8,909,158          7,628,799
                                                         =============     =============
</TABLE>


4.   DISCONTINUED OPERATIONS

     As a result of the Company's  decision to dispose of its Delivery  segment,
     the Delivery  segment 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.


                                      -8-
<PAGE>

                         MDSI MOBILE DATA SOLUTIONS INC.

                 Notes to the Consolidated Financial Statements
                    For the three months ended March 31, 2000
                      (Expressed in United States dollars)
                                   (Unaudited)


4.   DISCONTINUED OPERATIONS (continued)

     Summarized  financial  information  of the  discontinued  operations  is as
     follows:

<TABLE>
Results of discontinued operations
--------------------------------------------------------------------------------------------------------------------
                                                                  March 31, 2000                March 31, 1999
                                                              ------------------------     -------------------------
<S>                                                            <C>                           <C>
   Revenues                                                    $               -             $       1,912,378
                                                              ========================     =========================
   Loss before income taxes                                                    -                    (1,572,278)
   Income tax                                                                  -                            -
                                                              ------------------------     -------------------------
                                                                               -                    (1,572,278)
   Estimated loss on future operations and disposal
      net of income taxes                                                      -                    (2,300,405)
                                                              ------------------------     -------------------------
   Income (loss) from discontinued operations                  $               -             $      (3,872,683)
                                                              ========================     =========================


Financial position of discontinued operations
--------------------------------------------------------------------------------------------------------------------
                                                                  March 31, 2000              December 31, 1999
                                                              ------------------------     -------------------------
   Current assets                                              $       1,436,819             $         960,610
   Long term assets                                                            -                             -
                                                              ------------------------     -------------------------
   Total assets of discontinued operations                     $       1,436,819             $         960,610
                                                              ========================     =========================
   Current liabilities                                         $         440,226             $         173,424
   Long term liabilities                                                       -                             -
                                                              ------------------------     -------------------------
   Total liabilities of discontinued operations                $         440,226             $         173,424
                                                              ========================     =========================


Changes in cash flow of discontinued operations
--------------------------------------------------------------------------------------------------------------------
                                                                  March 31, 2000                March 31, 1999
                                                              ------------------------     -------------------------
   Operating activities                                        $        (209,407)            $         859,232
   Investing activities                                                        -                       (62,718)
   Financing activities                                                        -                             -
                                                              ------------------------     -------------------------
   Cash provided by (used for) discontinued operations         $        (209,407)            $         796,514
                                                              ========================     =========================
</TABLE>


5.   SUBSEQUENT EVENTS

     On May 9, 2000,  the Company  announced it had entered into an agreement to
     purchase  Connectria  Corporation,  an online  service  management  and ASP
     company through an exchange of shares. The acquisition is expected to close
     in the second quarter of 2000.



                                      -9-
<PAGE>

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

     Certain  statements  and  information  contained  in this  Form  constitute
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934. Such forward-looking  statements involve known and unknown
risks,  uncertainties  and other  factors  that may cause  the  actual  results,
performance  or  achievement of the Company,  or  developments  in the Company's
industry,  to differ  materially  from the anticipated  results,  performance or
achievements  expressed  or implied  by such  forward-looking  statements.  Such
factors  include,  but are not  limited  to:  the  Company's  limited  operating
history,  history of losses, lengthy sales cycles, the Company's dependence upon
large  contracts and relative  concentration  of customers,  risks involving the
management of growth and  integration of  acquisitions,  risks  associated  with
performance of pre-existing contracts assumed through acquisitions, competition,
product  development  risks and risks of  technological  change,  dependence  on
selected vertical markets and third-party marketing relationships and suppliers,
the Company's ability to protect its intellectual  property rights and the other
risks and  uncertainties  detailed  in the  Company's  Securities  and  Exchange
Commission  filings,  including the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.

     All  financial  information  in this Form is  expressed  in  United  States
dollars unless otherwise noted.

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
companies, cable companies and insurance 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 provide a cost-effective  method for
companies with mobile workers to utilize data communications to communicate with
such workers,  and for such workers to interface on a real-time basis with their
corporate information systems.

     The Company's revenue is derived from (i) software and services, consisting
of the  licensing  of software  and  provision  of related  services,  including
project management, installation,  integration, customization and training; (ii)
third party  products  and  services,  consisting  of the  provision of non-MDSI
products and services as part of the total contract;  and (iii)  maintenance and
support,  consisting of the provision of after-sale  support services as well as
hourly, annual or extended maintenance contracts.

     The  implementation  of a complete mobile data solution requires a wireless
data communications  network, a land-based data communications  network,  mobile
computing  devices  integrated  with wireless data  communication  modems,  host
computer equipment, industry specific application software like MDSI's, 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.





                                       10
<PAGE>

     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  twelve  months  and are  invoiced  either
annually or monthly.  Revenue for these services is recognized  ratably over the
term of the contract.

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

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

     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 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.




                                       11
<PAGE>

Disposition of Transportation Business Unit

     In February  1999,  the  Company's  Board of  Directors  approved a plan to
dispose of its Delivery segment  (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 $3,805,476.  The proceeds comprised of common shares
of DDS,  representing  an 11%  interest  in DDS,  and a  promissory  note in the
principal  amount of $343,905,  due January 1, 2001,  bearing interest at 8% per
annum.

     Under the terms of the  agreement  between the Company and DDS, the Company
has retained certain assets and liabilities of the discontinued operations.  The
Company  expects that it will liquidate these assets and liabilities by June 30,
2000. In addition,  the Company has agreed to complete the  implementation  of a
large  contract  with a taxi  customer.  The  Company  has  experienced,  and is
continuing to experience delays in the  implementation of this contract.  If the
Company is unable to complete  the  implementation  of the  contract on a timely
basis,  the  taxi  customer  has the  right to  cancel  the  contract.  Any such
cancellation  may require the Company to  reimburse  the  customer  for payments
received to date. The Company  believes that it has adequately  provided for the
costs to complete this contract.

     As a result of the Company's  decision to dispose of its Delivery  segment,
the Delivery  segment 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  Delivery
segment for the current and corresponding prior period.

     The  Company's net income was $612,000 for the period ended March 31, 2000.
This compares to a net loss of $3.3 million for the period ended March 31, 1999,
comprised of an after-tax  profit from continuing  operations of $600,000 and an
after-tax  loss  of  $3.9  million  on  discontinued  operations.  The  loss  on
discontinued operations is comprised of a loss on operations of $1.6 million and
a loss on disposal of $2.3 million.  There is no tax effect on these losses. The
discontinued operating loss includes not only the results of operations but also
foreign exchange losses and provisions against contracts to the measurement date
of February 25, 1999. The loss on disposal  includes the operating  results from
the  measurement  date to the effective  date, the costs of disposal,  severance
costs, and the estimated costs to complete the remaining taxi contract.


                                       12
<PAGE>


Results of Operations

     The following table sets forth, for the years indicated, certain components
of the selected financial data of the Company:


<TABLE>
                                                                                 Three months ended March 31,
                                                                             --------------------------------------
                                                                                   2000                1999
                                                                             ------------------  ------------------
                                                                                (Unaudited)         (Unaudited)
<S>                                                                                   <C>                 <C>
Revenue
   Software and services.................................................             79.3%               70.2%
   Third party products and services.....................................              4.1                21.7
   Maintenance and support...............................................             16.6                 8.1
                                                                             ------------------  ------------------
                                                                                     100.0               100.0
Direct costs.............................................................             37.6                46.7
                                                                             ------------------  ------------------
Gross profit.............................................................             62.4                53.3
                                                                             ------------------  ------------------
Operating expenses
   Research and development..............................................             15.9                13.0
   Sales and marketing...................................................             22.6                20.6
   General and administrative............................................             14.2                10.8
   Amortization of intangible assets.....................................              0.6                 0.5
                                                                             ------------------  ------------------
                                                                                      53.3                44.9
                                                                             ------------------  ------------------
Operating income.........................................................              9.1                 8.4

Other income (expense)...................................................             (1.7)               (1.3)
                                                                             ------------------  ------------------
Income before tax provision..............................................              7.4                 7.1

Provision for income taxes...............................................             (2.4)               (2.3)
                                                                             ------------------  ------------------
Net income (loss)from continuing operations..............................              5.0                 4.8

Income (loss) from discontinued operations...............................              0.0               (31.1)
                                                                             ------------------  ------------------
Net income (loss)........................................................              5.0%              (26.3)%
                                                                             ==================  ==================
</TABLE>




                                      -13-
<PAGE>

Three  Months Ended March  31,2000  Compared to the Three Months Ended March 31,
1999

     Revenue.  Revenue  decreased by $269,000  (2.2%) for the three months ended
March 31, 2000 as  compared  to the three  months  ended  March 31,  1999.  This
decrease was primarily due to the decrease in revenue from third party  products
and services  delivered  during the first  quarter of 2000  relative to the same
period in 1999.

     Software and services  revenue  increased by $920,000 (10.5%) for the three
months  ended March 31, 2000 as  compared  to the three  months  ended March 31,
1999.  This  increase  is  due to  additional  revenue  from  telecommunications
customers.

     Third party  products and  services  revenue  decreased  by $(2.2)  million
(81.6%)  for the three  months  ended  March 31,  2000 as  compared to the three
months ended March 31, 1999. 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.

     Maintenance and support revenue was $2.0 million for the three months ended
March 31, 2000 as compared to $1.0  million for the three months ended March 31,
1999.  Maintenance  and  support  revenue  has  increased  primarily  due to the
increased  growth in the  Company's  installed  customer  base.  Such revenue is
expected to fluctuate as it generally  corresponds  to the level of software and
services   revenue  the  Company  is  engaged  to  provide  in  support  of  its
installations.

     Direct Costs. Direct costs were 37.6% of revenue for the three months ended
March 31, 2000 as compared to 46.7% for the three  months  ended March 31, 1999.
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.

     Gross  Margins.  Gross  margins  were 62.4% of revenue for the three months
ended March 31, 2000 as compared to 53.3% for the three  months  ended March 31,
1999. The increase in gross margin as a percentage of revenue relates  primarily
to the change in the mix of revenues during the period.  During the three months
ended March 31, 2000 there was a decrease in third party  products  and services
revenue which  typically  has a lower gross  margin,  than software and services
revenue , which typically has a higher gross margin, relative to the same period
in 1999.

     Research and Development.  Research and development  expenses were 15.9% of
revenue for the three  months  ended March 31, 2000 and 13.0% of revenue for the
three months ended March 31, 1999.  Total research and development  expenditures
for the three months ended March 31, 2000 of $1.9 million represents an increase
of $325,000  (20.1%) as compared  to the same  period in 1999.  The  increase in
research  and  development  expenses  in  2000  is a  result  of  the  continued
development  and  enhancement  of the  Company's  Advantex  products  as well as
development  in the Company new  e-Business  strategy.  The Company  anticipates
continuing  to  commit  a  significant   portion  of  its  product  revenues  to
enhancement of existing products and the development of new products,  resulting
in an  anticipated  increase in the dollar  amounts of research and  development
expenses.



                                      -14-
<PAGE>

Three Months  Ended March 31, 2000  Compared to the Three Months Ended March 31,
1999 (Continued)

     Sales and Marketing. Sales and marketing expenses were 22.6% of revenue for
the three  months ended March 31, 2000 and 20.6% of revenue for the three months
ended March 31, 1999. This represents an increase of $183,000 (7.1%) as compared
to the same period in 1999.  The  increase was  primarily  due to an increase in
marketing,  sales and  technical  support  personnel  to support  the  Company's
increased  marketing  activities  worldwide.  The Company  anticipates  that the
dollar amounts of its sales and marketing  expenses will continue to increase as
the result of the Company's commitment to its international marketing efforts.

     General and Administrative.  General and administrative expenses were 14.2%
of revenue. Total general and administrative expenses of $1.7 million represents
an  increase of $381,000  (28.2%) for the three  months  ended March 31, 2000 as
compared  to  the  same  period  in  1999.  The  increase   represents  expanded
administrative  activity to support the Company's growth and the Company expects
that the dollar  amounts will  continue to increase as the Company  continues to
expand its staffing,  information systems and other administrative  requirements
necessary to support this growth.

     Other Income (Expense). Other income (expense) was $(212,000) for the three
months ended March 31, 2000 as compared to $(162,000) for the three months ended
March  31,  1999.  Substantially  all  of  other  income  (expense)  relates  to
fluctuations in the currencies of the Company's foreign operations,  interest on
cash and short term deposits, short-term borrowings under the line of credit and
capital lease obligations.

     Income  Taxes.  The Company  provided  for income taxes on earnings for the
three months ended March 31, 2000 at the rate of 30.0%,  after adjusting for the
amortization of intangible assets. The Company's effective tax rate reflects the
application of certain  operating loss carry forwards against taxable income and
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, capital leases,  private placements
and public offerings of its securities.  At March 31, 2000, the Company had cash
and cash equivalents of $16.7 million and working capital of $25.4 million.

     Cash  provided by (used in) operating  activities  was $1.6 million for the
three months ended March 31, 2000  compared to  $(312,000)  for the three months
ended March 31, 1999.  The net inflow of cash from operating  activities,  after
adding back depreciation and amortization of $492,000,  is due to a net increase
in non-cash  working  capital  items of  $544,000.  The net increase in non-cash
operating  working  capital  items is due  primarily  to a net increase in trade
payables of $442,000 plus an increase in deferred revenue of $1.6 million, which
was offset by an increase in accounts  receivable of $890,000 and an increase in
prepaids of $737,000.

     Cash  provided by financing  activities  of $2.7  million  during the three
months ended March 31, 2000  primarily  relates to proceeds  from common  shares
issued for $3.0  million  pursuant  to the  exercise  of stock  options  and the
Company's  Employee Share  Purchase  Plan. The Company repaid  $357,000 from its
capital  lease  program.  The capital  leases are to be repaid  evenly over a 36
month period  ending April 30, 2002,  bear  interest at 7.23% and are secured by
certain computer hardware and software assets of the Company.

     Cash used in  investing  activities  was $1.9  million for the three months
ended March 31, 2000 as compared to $636,000  for the three  months  ended March
31, 1999. Total investing  activity during the three months ended March 31, 2000
consisted  of  purchases  of capital  assets,  including  computer  hardware and
software  for use in  research  and  development  activities  and to support the
growth of the  Company's  corporate  information  systems,  and  acquisition  of
investments. Purchases in 1999 related only to capital assets.



                                      -15-
<PAGE>

Liquidity and Capital Resources (Continued)

     Existing  sources of liquidity at March 31, 2000 include  $16.7  million of
cash and cash  equivalents and up to $8.0 million  available under the Company's
operating  line of credit.  At March 31,  2000,  the Company  had  provided as a
performance bond an irrevocable revolving letter of credit expiring May 28, 2001
for Belgian Franc 101,068,000 ($4.2 million).  Under the terms of the agreement,
borrowings  and  letters of credit  under the line are  limited to 60% to 90% of
eligible  accounts  receivable.  Borrowings  accrue interest at the bank's prime
rate plus 0.5%. At March 31, 2000, the Company had no borrowings  under the line
of credit.

     The Company  believes that future cash flows,  in addition to funds on hand
and its borrowing  capacity  under the line of credit,  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 may use cash to fund other  acquisitions of
businesses  or products  complementary  to the Company's  business  although the
Company  has  no  plans  to do  so.  The  Company  has  no  material  additional
commitments  other than  operating and capital  leases.  The Company may look to
obtain  additional  equity  or debt  financing  to fund  future  growth or other
investing activities,  which may or may not be available on attractive terms, or
at all, and may be dilutive to current or future shareholders.

ITEM 3:  QUANTITIATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     The Company's  primary market risk is foreign currency  exchange rates. The
Company's  foreign  currency  exposure is primarily  with the United  States and
Western  Europe.  Foreign  exchange  risk arises  when the  Company  enters into
transactions denominated in local currencies and not the functional currency.

     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 the
Canadian and United States dollars and the Great Britain pound.  The Company has
operations  in the United  States and Great  Britain in addition to its Canadian
operations and did not hedge these exposures in 1999.  However,  the Company may
from  time-to-time  hedge any net exposure to the United  States  dollar and the
Great Britain pound.

     As of March 31, 2000,  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 would be approximately $3.5
million.  The majority of the Company's  foreign exchange  exposure is to United
States  dollar.  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.

     The Company has entered into foreign currency forward  contracts in respect
of net exposures  under customer  contracts to the Belgian Franc and the British
Pound. Effective January 1, 1999, the Belgian Franc is tied to the Euro, the new
European  Union  common  currency.  The effect of the these  transactions  is to
reduce  the  potential   reduction  in  future   earnings  from  a  hypothetical
instantaneous  10%  change in quoted  foreign  currency  exchange  rates to $3.2
million.

     The  Company  believes  that it does  not  have any  material  exposure  to
interest or commodity  risks.  The Company is exposed to economic and  political
changes in  international  markets where the Company  competes such as inflation
rates, recession, foreign ownership restrictions and other external factors over
which the Company  has no control;  domestic  and foreign  government  spending,
budgetary and trade policies.




                                      -16-
<PAGE>

Part II -  OTHER INFORMATION

     ITEM 1. Legal Proceedings

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

     ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

          a)   Sales of Unregistered Securities

                None

          b)   Use of Proceeds from Sales of Registered Securities

               None.

     ITEM 3. Defaults Upon Senior Securities

          None.

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

          None.

     Item 5. OTHER INFORMATION

          None.

     Item 6. EXHIBITS AND REPORTS ON FORM 8-K

          (a)   Exhibits

        Exhibit
        Number          Description
        ------          -----------

        99.1            Private  Securities  Litigation  Reform  Act of  1995 -
                        Safe Harbor for Forward-Looking Statements

        (b)     Reports on Form 8-K

                None


                                      -17-
<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 15, 2000        By:   /s/ KENNETH R. MILLER
                                 ----------------------------------------
                                 Name:  Kenneth R. Miller
                                 Title: Chief Executive Officer




Date:  May 15, 2000        By:   /s/ VERNE D. PECHO
                                 ----------------------------------------
                                 Name:  Verne D. Pecho
                                 Title: Vice President Finance &
                                         Administration and Chief Financial
                                         Officer
                                         (Principal Financial and  Accounting
                                         Officer)











                                      -18-

<PAGE>

        Exhibit
        Number          Description
        ------          -----------

        99.1            Private  Securities  Litigation  Reform  Act of  1995 -
                        Safe Harbor for Forward-Looking Statements