<PAGE>   1
================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                   ------------------------------------------

                                    FORM 10-Q


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

       For the quarterly period ended September 30, 1997

                                              OR

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

  For the transition period from ___________________ to ______________________.

                         Commission file number 0-28968


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


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


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

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



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


           The number of outstanding shares of the registrant's common
            stock, no par value, at September 30, 1997 was 6,402,518.
================================================================================


<PAGE>   2
                         MDSI MOBILE DATA SOLUTIONS INC.

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


<TABLE>
<CAPTION>
                                                                                    PAGE
                                                                                    ----
<S>                                                                                  <C>
PART I - FINANCIAL INFORMATION

        ITEM 1.  FINANCIAL STATEMENTS

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

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

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

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

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


PART II - OTHER INFORMATION

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

        ITEM 2.  CHANGES IN SECURITIES 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...................................................18

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


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

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


                                      -2-


<PAGE>   3
PART I - FINANCIAL INFORMATION

         ITEM 1.  FINANCIAL STATEMENTS

                         MDSI MOBILE DATA SOLUTIONS INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                         (EXPRESSED IN CANADIAN DOLLARS)
                                   (UNAUDITED)


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

CURRENT ASSETS
    Cash and cash equivalents                 $  6,414,219   $ 20,207,019
    Accounts receivable, net
       Trade                                    10,799,293     15,264,175
       Unbilled                                 12,771,324      2,811,561
    Work in progress                             1,548,344      1,515,099
    Prepaid expenses                             1,208,274        148,597
    Deferred income taxes                        2,789,322        149,767
                                              ------------   ------------
                                                35,530,776     40,096,218
CAPITAL ASSETS, NET                              3,819,634      1,958,758
INTANGIBLE ASSETS, NET                           6,687,903      3,516,782
                                              ------------   ------------
TOTAL ASSETS                                  $ 46,038,313   $ 45,571,758
                                              ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

    Accounts payable                          $  8,095,956   $ 10,704,035
    Accrued liabilities                         11,253,529      1,167,952
    Deferred revenue                             4,437,712      5,970,161
    Notes payable                                       --        428,424
    Current portion of long term debt              211,156        391,000
    Current obligations under capital leases        40,625         54,767
                                              ------------   ------------
                                                24,038,978     18,716,339
LONG-TERM DEBT                                     296,324             --
OBLIGATIONS UNDER CAPITAL LEASES                        --         19,710
                                              ------------   ------------
TOTAL LIABILITIES                               24,335,302     18,736,049
                                              ------------   ------------
STOCKHOLDERS' EQUITY
    Common stock                                42,547,838     30,681,176
    Special warrants                                    --      3,925,100
    Treasury stock                                (122,743)      (122,743)
    Retained earnings (deficit)                (20,722,084)    (7,647,824)
                                              ------------   ------------
                                                21,703,011     26,835,709
                                              ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $ 46,038,313   $ 45,571,758
                                              ============   ============
</TABLE>


            See notes to condensed consolidated financial statements


                                      -3-


<PAGE>   4
                         MDSI MOBILE DATA SOLUTIONS INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                         AND RETAINED EARNINGS (DEFICIT)
                         (EXPRESSED IN CANADIAN DOLLARS)
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED            NINE MONTHS ENDED
                                                     SEPTEMBER 30,                SEPTEMBER 30,
                                            ---------------------------   ---------------------------
                                                1997           1996           1997           1996
                                            ------------   ------------   -------------  ------------
<S>                                         <C>            <C>            <C>            <C>         
REVENUE
    Software and services                   $  9,175,389   $  6,134,847   $ 27,450,138   $ 12,643,623
    Terminals and infrastructure               1,358,967      2,233,808      7,878,285      2,233,808
    Third party products and services          5,236,191      6,496,071     15,442,091      7,220,437
    Maintenance and support                    1,032,661        732,541      2,529,286      1,910,407
                                            ------------   ------------   ------------   ------------
                                              16,803,208     15,597,267     53,299,800     24,008,275
DIRECT COSTS                                  14,425,235     10,049,560     35,322,991     13,482,195
                                            ------------   ------------   ------------   ------------
GROSS PROFIT                                   2,377,973      5,547,707     17,976,809     10,526,080
                                            ------------   ------------   ------------   ------------
OPERATING EXPENSES
    Research and development                   1,870,392      1,310,996      5,112,770      2,819,033
    Sales and marketing                        3,452,724      1,785,734      8,474,126      3,830,497
    General and administrative                 1,795,928        951,271      4,600,321      2,009,332
    Restructuring cost                         1,145,152             --      1,145,152             --
    Amortization of intangible assets            238,101        143,718        599,062        187,693
    Acquired research and development                 --             --     10,002,982      8,523,363
                                            ------------   ------------   ------------   ------------
                                               8,502,297      4,191,719     29,934,413     17,369,918
                                            ------------   ------------   ------------   ------------
OPERATING INCOME (LOSS)                       (6,124,324)     1,355,988    (11,957,604)    (6,843,838)
OTHER INCOME                                     135,421         31,364        268,973         51,933
                                            ------------   ------------   ------------   ------------
INCOME (LOSS) BEFORE TAX PROVISION            (5,988,903)     1,387,352    (11,688,631)    (6,791,905)
RECOVERY OF (PROVISION FOR) INCOME TAXES          43,040       (344,816)    (1,385,629)      (463,297)
                                            ------------   ------------   ------------   ------------
NET INCOME (LOSS) FOR THE PERIOD              (5,945,863)     1,042,536    (13,074,260)    (7,255,202)

RETAINED EARNINGS (DEFICIT), BEGINNING OF
PERIOD                                       (14,776,221)    (9,931,433)    (7,647,824)    (1,633,695)
                                            ------------   ------------   ------------   ------------
RETAINED EARNINGS (DEFICIT), END OF PERIOD  $(20,722,084)  $ (8,888,897)  $(20,722,084)  $ (8,888,897)
                                            ============   ============   ============   ============

PRIMARY EARNINGS (LOSS) PER COMMON SHARE    $      (0.88)  $       0.21   $      (1.99)  $      (1.42)
                                            ============   ============   ============   ============

WEIGHTED AVERAGE SHARES OUTSTANDING            6,774,782      5,116,527      6,585,168      5,116,527
                                            ============   ============   ============   ============
</TABLE>


            See notes to condensed consolidated financial statements


                                      -4-


<PAGE>   5
                               MDSI MOBILE DATA SOLUTIONS INC.
                       CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                               (EXPRESSED IN CANADIAN DOLLARS)
                                         (UNAUDITED)


<TABLE>
<CAPTION>
                                                              NINE MONTHS ENDED
                                                                 SEPTEMBER 30,
                                                         ---------------------------
                                                             1997           1996
                                                         ------------   ------------
<S>                                                      <C>            <C>          
CASH FLOWS FROM OPERATING ACTIVITIES
    Net income (loss) for the period                     $(13,074,260)  $ (7,255,202)
    Items not affecting cash:
        Depreciation and amortization                       1,540,636        617,830
        Deferred income taxes                                (238,264)       324,278
        Acquired research development                      10,002,982      8,523,363
        Changes in non-cash operating working        
          capital items                                    (5,703,035)    (4,711,000)
                                                         ------------   ------------
    Net cash used in operating activities                  (7,471,941)    (2,500,731)
                                                         ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
    Issuance of common stock                                1,013,484         24,740
    Repayment of long-term debt                            (3,299,646)      (246,200)
    Repayment of loan notes                                  (428,424)            --
    Proceeds from special warrants                                 --      3,925,100
    Repayment of capital leases                               (33,853)       (34,399)
                                                         ------------   ------------
    Net cash provided by (used in) financing 
      activities                                           (2,748,439)     3,669,241
                                                         ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
    Acquisition of MDSI UK                                         --     (1,089,973)
    Acquisition of Alliance                                (1,892,426)            --
    Acquisition of capital assets                          (1,679,994)      (560,121)
                                                         ------------   ------------
    Net cash used in investing activities                  (3,572,420)    (1,650,094)
                                                         ------------   ------------
NET CASH OUTFLOW                                          (13,792,800)      (481,584)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD             20,207,019      1,921,799
                                                         ------------   ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                 $  6,414,219   $  1,440,215
                                                         ============   ============
</TABLE>

SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES

During the nine months ended September 30, 1997, the Company issued 280,000
common shares and 280,000 common share purchase warrants on the conversion of
280,000 special warrants without additional consideration. Also, during the nine
months ended September 30, 1997, the Company acquired all of the issued and
outstanding shares of Alliance Systems, Incorporated ("Alliance") for
$9,116,828. Consideration consisted of 347,750 common shares of the Company and
payments of $2,188,750, including cash of $1,892,426 (US$1,367,869) and
unsecured notes in the principal amount of $296,324 (US$214,219).

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


            See notes to condensed consolidated financial statements


                                      -5-


<PAGE>   6
                         MDSI MOBILE DATA SOLUTIONS INC.
            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
                         (EXPRESSED IN CANADIAN DOLLARS)
                                   (UNAUDITED)

1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    (a)  Basis of presentation

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

    (b)  Use of estimates

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

    (c)  Recent pronouncements

         In February 1997, the Financial Accounting Standards Board issued
         Statement No. 128, Earnings per Share (SFAS 128), which established new
         standards for computing and presenting earnings per share. With SFAS
         128, Primary earnings per share will be replaced by Basic earnings per
         share which is computed by dividing income available to common
         stockholders by the weighted average number of shares outstanding for
         the period. In addition, SFAS 128 also requires dual presentation of
         Basic and Diluted earnings per share on the face of the income
         statement with a reconciliation of the numerator and denominator of the
         Basic earnings per share to that of the Diluted earnings per share.
         SFAS 128 will be effective for fiscal and interim periods ending after
         December 15, 1997. If SFAS 128 had been adopted during the three months
         ended September 30, 1997 and 1996, Basic earnings (loss) per share
         would have been $(0.93) and $0.26, respectively. If SFAS 128 had been
         adopted during the nine months ended September 30, 1997 and 1996, Basic
         earnings (loss) per share would have been ($2.11) and $(1.81),
         respectively. Diluted earnings per share would not have been
         significantly different than Primary earnings (loss) per common share
         as reported in these financial statements.

         In June 1997, the Financial Accounting Standards Board issued Statement
         No. 130, Reporting Comprehensive Income, which is required to be
         adopted on January 1, 1998. SFAS 130 establishes standards for the
         reporting and display of comprehensive income and its components in a
         full set of general purpose financial statements. Reclassification of
         financial statements for earlier periods presented is required. The
         impact of SFAS 130 on the Company's financial statements is not
         expected to be material.

         In June 1997, the Financial Accounting Standards Board issued Statement
         No. 131, Disclosures About Segments of an Enterprise and Related
         Information, which is required to be adopted on January 1, 1998. SFAS
         131 establishes new standards for the reporting of segmented
         information in annual financial statements and requires the reporting
         of certain selected segmented information in interim 


                                      -6-


<PAGE>   7
         reports to shareholders. The impact of SFAS 131 on the Company's
         financial statements is not expected to be material.

         In October 1997, the American Institute of Certified Public Accountants
         issued a Statement of Position, Software Revenue Recognition (SOP
         97-2), which provides guidance in applying generally accepted
         accounting principles in recognizing revenue on software transactions.
         SOP 97-2 is effective for transactions entered into in fiscal years
         beginning after December 15, 1997. The impact on the Company's
         financial statements is not expected to be material.

2.  ACQUISITION OF ALLIANCE SYSTEMS, INCORPORATED

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

Estimated fair value of net assets acquired:

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

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


<TABLE>
<CAPTION>
                                      Nine months ended
                                        September 30,
                                  ------------------------
                                     1997          1996
                                  -----------   -----------  
<S>                               <C>           <C>       
Revenue                           $54,496,893   $44,368,819
                                  ===========   ===========
Net income (loss)                 $(4,404,182)  $   961,874
                                  ===========   ===========
Earnings (loss) per common share  $     (0.65)  $      0.18
                                  ===========   ===========
</TABLE>


3.  PROVISION FOR RESTRUCTURING AND CHANGES IN ESTIMATES TO COMPLETE

    During the three months ended September 30, 1997, the Company recorded a
    one-time charge of $6,371,192 (net of tax recoveries of $217,724) including
    $1,145,152 with respect to restructuring of certain operations and
    $5,226,040 due to changes in estimates to complete certain contracts entered
    into by its MDSI UK operations which existed prior to the Company's
    acquisition of MDSI UK.


                                       -7-


<PAGE>   8
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

           Certain statements and information contained in this Report
constitute forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievement of the Company, or developments in the
Company's industry, to differ materially from the anticipated results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, but are not limited to: the Company's limited
operating history, lengthy sales cycles, the Company's dependence upon large
contracts and relative concentration of customers, risks involving the
management of growth and integration of acquisitions, 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, 1996.

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

OVERVIEW

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

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

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

           Revenue for software and services has historically accounted for a
substantial portion of the Company's revenue. Typically, the Company enters into
a fixed price contract with a customer for the licensing of selected software
products and the provision of specific services that are generally performed
within six to twelve months. Pricing for these contracts includes license fees
as well as a fee for professional services. The Company 


                                       -8-


<PAGE>   9
generally recognizes total revenue for software and services associated with a
contract using a percentage of completion method based on the total costs
incurred over the total estimated costs to complete the contract.

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

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

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

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

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

           The Company's revenue is dependent, in large part, on significant
contracts from a limited number of customers. As a result, any substantial delay
in the Company's completion of a contract, delays due to and difficulties
associated with the introduction of new products, the inability of the Company
to obtain new contracts or the cancellation of an existing contract by a
customer could have a material adverse effect on the Company's results of
operations and financial condition. During the three months ended September 30,
1997, the Company experienced delays in the signing or implementation of certain
contracts resulting in a reduction in revenue and net earnings relative to the
previous period. The Company's contracts are generally cancelable upon notice by
the customer. The loss of certain contracts could have a material adverse effect
on the Company's business, operating results and financial condition. As a
result of these and other factors, the Company's results of operations have
fluctuated in the past and may continue to fluctuate from period-to-period.


                                       -9-


<PAGE>   10
EFFECTS OF ACQUISITIONS

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

The Company acquired MDSI UK on June 28, 1996. MDSI UK develops, markets,
implements and supports mobile workforce management application software,
wireless connectivity software, wireless data network equipment, mobile
computing devices and related in-vehicle equipment used by customers principally
in the taxi, courier and roadside recovery markets. The acquisition resulted in
the write-off of $8.5 million associated with acquired research and development.
During the three months ended September 30, 1997, the Company recorded a
one-time charge of $5.6 million related to its MDSI UK operations. Of this
amount, $400,000 relates to severance and other restructuring costs and $5.2
million relates to increases in estimates to complete certain contracts which
existed prior to the Company's acquisition of MDSI UK. As the acquisition was
completed at the end of the second quarter in 1996, the Company's results of
operations for the nine months ended September 30, 1996 include only the results
of operations of MDSI UK for the three months ended September 30, 1996.

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

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


                                       -10-
<PAGE>   11
Results of Operations

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

<TABLE>
<CAPTION>
                                                Three months ended September 30,        Nine months ended September 30,
                                                --------------------------------        -------------------------------
                                                      1997              1996                 1997              1996
                                                --------------     -------------        -------------     ------------- 
<S>                                                 <C>               <C>                   <C>               <C>         
REVENUE
  Software and services.....................         54.6%             39.3%                 51.5%             52.7%
  Terminals and infrastructure..............          8.1              14.3                  14.8               9.3
  Third party products and services.........         31.2              41.6                  29.0              30.1
  Maintenance and support...................          6.1               4.8                   4.7               7.9
                                                --------------     -------------        -------------     ------------- 
                                                    100.0             100.0                 100.0             100.0          

DIRECT COSTS                                         85.8              64.4                  66.3              56.2
                                                --------------     -------------        -------------     ------------- 
GROSS PROFIT                                         14.2              35.6                  33.7              43.8
                                                --------------     -------------        -------------     ------------- 
OPERATING EXPENSE       
  Research and development..................         11.1               8.4                   9.6              11.7
  Sales and marketing.......................         20.5              11.4                  15.9              16.0
  General and administrative................         10.7               6.1                   8.6               8.4
  Restructuring.............................          6.8                 -                   2.1                 -
  Amortization of intangible assets.........          1.4               0.9                   1.1               0.8               
  Acquired research and development.........            -                 -                  18.8              35.5
                                                --------------     -------------        -------------     -------------    
                                                     50.5              26.8                  56.1              72.4
                                                --------------     -------------        -------------     ------------- 
OPERATING INCOME (LOSS)                             (36.3)              8.8                 (22.4)            (28.6)

OTHER INCOME                                          0.6               0.1                   0.5               0.3
                                                --------------     -------------        -------------     ------------- 
INCOME (LOSS) BEFORE TAX PROVISION                  (35.7)              8.9                 (21.9)            (28.3)
      
RECOVERY OF (PROVISION FOR) INCOME TAXES              0.3              (2.2)                 (2.6)             (1.9)
                                                --------------     -------------        -------------     ------------- 
NET INCOME (LOSS) FOR THE PERIOD                    (35.4)%             6.7%                (24.5)%           (30.2)%
                                                ==============     =============        =============     =============      
</TABLE>





                                      -11-
<PAGE>   12
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 1996

            Revenue. Revenue increased by $1.2 million (7.7%) for the three
months ended September 30, 1997 as compared to the three months ended September
30, 1996. During the three months ended September 30, 1997, the Company
experienced delays in the signing or implementation of certain contracts
resulting in a reduction in revenue relative to the previous period.

            Software and services revenue increased by $3.0 million (49.6%) for
the three months ended September 30, 1997 as compared to the three months ended
September 30, 1996. This increase is due primarily to the acquisition of
Alliance in April 1997 and additional revenue from customers in both the
telecommunications and utility markets.

            Terminals and infrastructure revenue decreased by $875,000 (39.2%)
for the three months ended September 30, 1997 as compared to the three months
ended September 30, 1996. This decrease is due primarily to changes in
estimates to complete certain pre-existing contracts in the MDSI UK operations
and the resulting delays in delivery of terminals. Terminals and infrastructure
revenue is derived from the MDSI UK operations.

            Third party products and services revenue decreased by $1.3 million
(19.4%) for the three months ended September 30, 1997 as compared to the three
months ended September 30, 1996. Third party products and services revenue
primarily represents revenue earned from certain customers in the utility
market pursuant to agreements under which the Company provides third party
products and services. These third party products typically include host
computer equipment and mobile computing devices, 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 of
certain contracts and the rollout schedules which are established primarily by
the customers. Accordingly, this will result in large fluctuations in revenue,
direct costs, gross profits and income from operations from one period to
another.

            Maintenance and support revenue was $1.0 million for the three
months ended September 30, 1997 as compared to $723,000 for the three months
ended September 30, 1996. Maintenance and support revenue has increased
primarily due to the acquisition of Alliance. In addition, 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 85.8% of revenue for the three
months ended September 30, 1997 as compared to 64.4% for the three months ended
September 30, 1996. The increase in direct costs as a percentage of revenue
relates primarily to the increases in estimates to complete certain
pre-existing contracts in the MDSI UK operations. Under the percentage of
completion method used to recognize revenue on fixed price contracts, where it
has been determined that a contract will be completed at a loss based upon
changes in estimates to complete, the Company is required to recognize the
full amount of such losses in the period that the loss is determined. During
the three months ended September 30, 1997, the Company recorded direct costs of
$5.2 million relating to estimated losses on such pre-existing contracts in the
MDSI UK operations due to changes in estimates to complete. Excluding these
contracts, the Company's direct costs were 54.7% of revenue for the three
months ended September 30, 1997.

            Direct costs include labor and other costs directly related to a
project, including the provision of services and support, production and
inventory costs associated with terminals and infrastructure equipment provided
by MDSI UK and costs related to host equipment and mobile devices on behalf of
third party product sales. Labor costs included direct payroll, benefits and
overhead charges.

            Gross Margins. Gross margins were 14.2% of revenue for the three
months ended September 30, 1997 as compared to 35.6% for the three months ended
September 30, 1996. After adjusting for the margins on the pre-existing
contracts in the MDSI UK operations, the Company's gross margins were 45.3% of
revenue for the three months ended September 30, 1997. The increase in adjusted
gross margins is due primarily to the relative increase in software and
services which typically have a higher margin and a corresponding decrease in
revenue

                                      -12-
<PAGE>   13
relating to third party products and services and terminals and infrastructure
in the MDSI UK operations which typically have a lower margin.

           The Company is in the process of implementing several changes
associated with the pricing, product specifications and implementation of
contracts within MDSI UK that are intended to improve gross margins on software
and services. The Company anticipates that these changes will not significantly
affect gross margins until completion of pre-existing contracts. There can be no
assurance that the procedures implemented by the Company will result in
improvements to the gross margins from the MDSI UK operations.

           Research and Development. Research and development expenses were
11.1% of revenue for the three months ended September 30, 1997 and 8.4% of
revenue for the three months ended September 30, 1996. Total research and
development expenditures for the three months ended September 30, 1997 of $1.9
million represents an increase of $559,000 (42.6%) as compared to the same
period in 1996. The increase in research and development expenses in 1997 is a
result of the continued development and enhancement of the Company's Advantex
products. The Company anticipates continuing to commit a significant portion of
its product revenues to enhancement of existing products and the development of
new products, resulting in an anticipated increase in the dollar amounts of
research and development expenses.

           Sales and Marketing. Sales and marketing expenses were 20.5% of
revenue for the three months ended September 30, 1997 and 11.4% of revenue for
the three months ended September 30, 1996. This represents an increase of $1.7
million (93.3%) as compared to the same period in 1996. 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 effort.

           General and Administrative. General and administrative expenses were
10.7% of revenue for the three months ended September 30, 1997 and 6.1% of
revenue for the three months ended September 30, 1996. Total general and
administrative expenses of $1.8 million represents an increase of $845,000
(88.9%) for the three months ended September 30, 1997 as compared to the same
period in 1996. The increase was due primarily to the inclusion of costs
associated with Alliance and the continued hiring of additional accounting and
administrative personnel to support the Company's growth. The Company expects
that the dollar amount of its general and administrative expenses will increase
in the future as the Company expands its staffing, information systems and other
administrative costs to support its expanding operations.

           Restructuring Costs. During the three months ended September 30,
1997, the Company incurred costs of $1.1 million associated with the
restructuring of its MDSI UK and Kansas operations. These costs include
severance and related provisions for future costs as a result of the
restructuring.

           Other Income. Other income was $135,000 for the three months ended
September 30, 1997 as compared to $31,000 for the three months ended September
30, 1996. Substantially all of other income relates to interest income on cash
and short term deposits and fluctuations in the currencies of the Company's
foreign operations.

           Income Taxes. The Company provided for income taxes on earnings for
the three months ended September 30, 1997 at the rate of 28.2%, after adjusting
for the amortization of intangible assets and the recovery of income taxes
related to restructuring costs and losses on certain pre-existing contracts in
the MDSI UK operations. 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, UK and other foreign jurisdictions' tax
rates.


                                      -13-


<PAGE>   14
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED SEPTEMBER
30, 1996

           Revenue - Revenue increased by $29.3 million (122%) for the nine
months ended September 30, 1997 as compared to the nine months ended September
30, 1996. This increase in revenue is due to revenue contributed by Alliance and
MDSI UK during the nine months ended September 30, 1997 of $20.1 million and the
continued growth of existing businesses.

           Software and services revenue increased by $14.8 million (117%) for
the nine months ended September 30, 1997 as compared to the nine months ended
September 30, 1996. This increase is due primarily to the acquisitions of
Alliance and MDSI UK in April 1997 and June 1996, respectively, and additional
revenue from customers in both the telecommunications and utility markets.

           Terminals and infrastructure revenue increased by $5.6 million (253%)
for the nine months ended September 30, 1997 due to the inclusion of revenue
from the MDSI UK operations for the full nine months ended September 30, 1997
compared to the results only being included for the same period in 1996
subsequent to the acquisition of MDSI UK at the end of June 1996. Terminals and
infrastructure revenue is derived from the MDSI UK operations.

           Third party products and services revenue increased by $8.2 million
(114%) for the nine months ended September 30, 1997 compared the nine months
ended September 30, 1996. Third party products and services revenue primarily
represents revenue earned from certain customers in the utility market pursuant
to agreements under which the Company provides third party products and
services, typically host computer equipment and mobile computing devices, as
part of the installation of software and provision of services. Revenue from
deliveries of third party products and services will fluctuate from period to
period given the timing of certain contracts and the rollout schedules which are
established primarily by the customers. Accordingly, this will result in large
fluctuations in revenue, direct costs, gross profits and income from operations
from one period to another.

           Maintenance and support revenue was $2.5 million for the nine months
ended September 30, 1997 as compared to $1.9 million for the nine months ended
September 30, 1996. Maintenance and support revenue has increased primarily due
to the acquisitions of Alliance and MDSI UK. In addition, such revenue is
expected to fluctuate as it generally corresponds to the level of software and
services revenue the Company is engaged to provide.


           Direct Costs - Direct costs were 66.3% of revenue for the nine months
ended September 30, 1997 as compared to 56.2% for the nine months ended
September 30, 1996. The increase in direct costs as a percentage of revenue
relates primarily to the increases in estimates to complete relating to certain
pre-existing contracts in the MDSI UK operations. Under the percentage of
completion method used to recognized revenue on fixed price contracts, where it
has been determined that a contract will be completed at a loss based upon
changes in estimates to complete, the Company is required to recognize the full
amount of such losses in the period that the loss is determined. During the nine
months ended September 30, 1997, the Company recorded direct costs of $5.2
million relating to estimated losses on such pre-existing contracts in the MDSI
UK operations due to changes in estimates to complete. Excluding these
contracts, the Company's direct costs 56.5% of revenue for the nine months ended
September 30, 1997.

           Direct costs include labor and other costs directly related to a
project including those related to the provision of services and support,
production and inventory costs associated with terminals and infrastructure
equipment provided by MDSI UK and costs related to host equipment and mobile
devices on behalf of third party product sales. Labor costs included direct
payroll, benefits and overhead charges.


           Gross Margins. Gross margins were 33.7% of revenue for the nine
months ended September 30, 1997 as compared to 43.8% for the nine months ended
September 30, 1996. After adjusting for the margins on the pre-existing
contracts in the MDSI UK operations, the Company's gross margins were 43.5% of
revenue.


                                      -14-


<PAGE>   15
           The Company is in the process of implementing several changes
associated with the pricing, product specifications and implementation of
contracts within MDSI UK that are intended to improve gross margins on software
and services. The Company anticipates that these changes will not significantly
affect gross margins until completion of existing contracts. There can be no
assurance that the procedures implemented by the Company will result in
improvements to the gross margins from the MDSI UK operations.

           Research and Development. Research and development expenses were 9.6%
of revenue for the nine months ended September 30, 1997 and 11.7% of revenue for
the nine months ended September 30, 1996. Total research and development
expenditures for the nine months ended September 30, 1997 of $5.1 million
represents an increase of $2.3 million (81.4%) as compared to the same period in
1996. The increase in research and development expenses in 1997 is a result of
the continued development and enhancement of the Company's Advantex products.
The Company anticipates continuing to commit a significant portion of its
product revenues to enhancement of existing products and the development of new
products, resulting in an anticipated increase in the dollar amounts of research
and development expenses.

           Sales and Marketing. Sales and marketing expenses were 15.9% of
revenue for the nine months ended September 30, 1997 and 16.0% of revenue for
the nine months ended September 30, 1996. This represents an increase of $4.6
million (121%) as compared to the same period in 1996. 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 effort.

           General and Administrative. General and administrative expenses were
8.6% of revenue for the nine months ended September 30, 1997 and 8.4% of revenue
for the nine months ended September 30, 1996. Total general and administrative
expenses of $4.6 million represents an increase of $2.6 million (129%) for the
nine months ended September 30, 1997, as compared to the same period in 1996.
The increase was due primarily to the inclusion of costs associated with
Alliance and MDSI UK and the hiring of additional accounting and administrative
personnel to support the Company's growth. In addition, the Company expects that
the dollar amount of its general and administrative expenses will increase in
the future as the Company expands its staffing, information systems and other
administrative costs to support its expanding operations.

           Restructuring Costs. During the nine months ended September 30, 1997,
the Company incurred costs of $1.1 million associated with the restructuring of
its MDSI UK and Kansas operations. These costs include severance and related
provisions for future costs as a result of the restructuring.

           Other Income. Other income was $269,000 for the nine months ended
September 30, 1997 as compared to $52,000 for the nine months ended September
30, 1996. Substantially all of other income relates to interest income on cash
and short term deposits and fluctuations in the currencies of the Company's
foreign operations

           Income Taxes. The Company provided for income taxes on earnings for
the nine months ended September 30, 1997 at the rate of 30.3%, after adjusting
for the amortization of intangible assets, acquired research and development
costs and the recovery of income taxes related to restructuring costs and losses
on certain pre-existing contracts in the MDSI UK operations. 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, UK and
other foreign jurisdictions' tax rates.


                                      -15-


<PAGE>   16
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 September 30, 1997, the Company had cash
and cash equivalents of $6.4 million and working capital of $11.5 million.

           Cash used in operating activities was $7.5 million for the nine
months ended September 30, 1997 compared to $2.5 million for the nine months
ended September 30, 1996. The outflow of cash from operating activities, after
adding back depreciation and amortization and acquired research and development
costs of $1.5 million and $10.0 million, respectively is due to a net decrease
in non-cash working capital items of $5.7 million. The net decrease in non-cash
operating working capital items of $5.7 million is due primarily to a net
increase in trade and unbilled accounts receivable of $3.8, a net increase of
$1.1 million relating to prepaid and other assets and a decrease in deferred
revenue of $1.5 million.

           Cash used in financing activities of $2.7 million during the nine
months ended September 30, 1997 relates to proceeds from common shares issued
for $1.0 million pursuant to the exercise of stock options and the Company's
Employee Share Purchase Plan, net of repayments for the remaining loan notes
from the MDSI UK acquisition, certain long-term debt and capital leases for
$428,000, $3.3 million and $34,000 respectively. In addition, during the nine
months ended September 30, 1997, the Company issued 280,000 common shares and
280,000 common share purchase warrants on the conversion of 280,000 special
warrants. The Company received no additional consideration on the conversion of
the special warrants.

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

           Cash used in investing activities was $3.6 million for the nine
months ended September 30, 1997 as compared to $1.7 million for the nine months
ended September 30, 1996. Total investing activity during the nine months ended
September 30, 1997 consisted of cash payments of $1.9 million on behalf of the
Alliance acquisition and purchases of capital assets for $1.7 million, including
computer hardware and software for use in research and development activities
and to support the growth of the Company's corporate information systems.

           Existing sources of liquidity at September 30, 1997 include $6.4
million of cash and cash equivalents and funds available under the Company's
operating line of credit. During the nine months ended September 30, 1997, the
Company increased its borrowing capacity under this line of credit whereby it
may now borrow up to a limit of $5 million. At September 30, 1997, US$200,000 of
such amount was committed to securing the Company's obligations under
outstanding letters of credit and approximately $61,000 was committed to
securing obligations under certain foreign exchange forward contracts. Under the
terms of the agreement, borrowings and letters of credit under the line are
limited to 60% to 90% of eligible accounts receivable. Borrowings accrue
interest at the bank's prime rate plus 0.5%. From time to time, the Company
draws on the line of credit for general working capital requirements related to
its operations.

           The Company believes that it has sufficient funds to meet cash
requirements for at least the next twelve months. Commensurate with its past and
expected future growth, the Company may increase, from time to time, its
borrowing facility under its operating line of credit to support its operations.
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
leases. The Company may look to obtain additional equity or debt financing to
fund future growth or other investing activities. Any additional equity or debt
financing may or may not be available on attractive terms, or at all, and may be
dilutive to current or future shareholders.


                                      -16-


<PAGE>   17
PART II -OTHER INFORMATION

         ITEM 1.   LEGAL PROCEEDINGS

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


         ITEM  2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

                   a) SALES OF UNREGISTERED SECURITIES

                      During the nine months ended September 30, 1997, the
                      Company issued 280,000 common shares and 280,000 share
                      purchase warrants on the conversion of 280,000 special
                      warrants for no additional consideration. Five share
                      purchase warrants entitle the holder to acquire an
                      additional common share of the Company at a price of
                      $14.90 per share until July 4, 1998.

                      The special warrants were offered and sold in June and
                      July 1996 in reliance upon the exemption from Registration
                      provided by Rule 903 of Regulation S and Rule 506 of
                      Regulation D under the Securities Act of 1933.

                   b) USE OF PROCEEDS FROM SALES OF REGISTERED SECURITIES

                      On November 25, 1996, the Company completed an initial
                      public offering of its common shares and on March 4, 1997,
                      reported its use of proceeds thereon Form S-R. There has
                      been no change in the information required by paragraphs
                      (f) (2) through (f) (4) of Item 701 of Regulation S-K from
                      that previously reported on Form S-R, except as follows
                      with respect to the Company's use of proceeds from the
                      initial public offering.

                      The net proceeds of $26,476,306 (US$19,352,092), after
                      deducting previously reported expenses, were utilized as
                      follows as of September 30, 1997:

<TABLE>
<S>                                                              <C>        
                      Repayment of loan notes                    $ 8,643,298
                      Repayment of Alliance indebtedness           3,299,646
                      Investment in Alliance                       1,892,426
                      Short-term investments                       2,500,000
                      Working capital including cash              10,140,936
                                                                 ------------
                                                                 $26,476,306
                                                                 ============
</TABLE>

         ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

                   None.

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

                   None.


                                      -17-


<PAGE>   18
         ITEM 5.   OTHER INFORMATION

                   None.

         ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

                   a) EXHIBITS

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

                   b) REPORTS ON FORM 8-K

                      On September 12, 1997, the Registrant filed a report on
                      Form 8-K regarding the announcement of the one-time
                      charges relating to the restructuring of certain acquired
                      operations and reflecting the increase in estimated costs
                      to complete certain contracts entered into by MDSI UK
                      which existed prior to the Registrant's acquisition of
                      MDSI UK.


                                      -18-


<PAGE>   19
SIGNATURES


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



                                MDSI MOBILE DATA SOLUTIONS INC.


Date:   November 14, 1997       By:    /s/ KENNETH R. MILLER
                                       ---------------------------------------
                                Name:  Kenneth R. Miller
                                Title: President




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


                                      -19-


<PAGE>   20
                         MDSI MOBILE DATA SOLUTIONS INC.

                                  EXHIBIT INDEX

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997





EXHIBIT 11.1

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


                                      -20-