SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 10549
                                    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, 2000 or

      ( ) Transition report pursuant to Section 13 or 15(d) of the
          Securities Exchange Act of 1934


    Commission file number: 0-28432

                  Boston Communications Group, Inc.
                  ----------------------------------------------------------
         (Exact name of registrant as specified in its charter)

                Massachusetts                        04-3026859
         -----------------------------            ------------------
     (State or other jurisdiction of          (I.R.S. Employer
      incorporation or organization)           Identification No.)

         100 Sylvan Road, Woburn, Massachusetts 01801
         --------------------------------------------
              (Address of principal executive offices)

  Registrant's telephone number, including area code: (617)692-7000

  -----------------------------------------------------------------
 (Former name, former address, former fiscal year, if changed since
   last report)

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 ( )

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of the latest practicable date.

As of October 19, 2000, the Company had outstanding  16,872,700 shares of common
stock, $.01 par value per share.





<PAGE>



                              INDEX


  PART I.   FINANCIAL INFORMATION:

  Item 1.   Financial Statements

            Consolidated Balance Sheets

            Consolidated Statements of Operations

            Consolidated Statements of Cash Flows

            Notes to Consolidated Financial Statements

  Item 2.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations

            Certain Factors That May Affect Future Results

  Item 3.   Quantitative and Qualitative Disclosures About Market
            Risk

  PART II. OTHER INFORMATION:

  Item 1. Legal Proceedings

  Item 6. Exhibits and Reports on Form 8-K





<PAGE>



                        BOSTON COMMUNICATIONS GROUP, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
               (In thousands, except share and per share amounts)
<TABLE>
                                                                                             September 30,              December 31,
ASSETS                                                                                       2000                       1999
                                                                                             ----                       ----
<S>                                                                                             <C>                         <C>

Current assets:

Cash and cash equivalents                                                                         $32,005                   $21,145
Short-term investments                                                                              8,071                     9,091
Accounts receivable, net of allowance for billing
  Adjustments and doubtful accounts of $1,987 in 2000   and $2,025 in 1999
                                                                                                   18,484                    18,546
Inventory                                                                                           1,034                     2,007
Deferred income taxes                                                                                   -                     1,169
Prepaid expenses and other assets                                                                   1,106                       819
Assets held for sale                                                                                3,758                     3,819
                                                                                                    -----                     -----
     Total current assets                                                                          64,458                    56,596

Property and equipment, net                                                                        43,194                    39,365

Goodwill                                                                                            2,399                     2,854
Other assets                                                                                        1,030                       516
                                                                                                    -----                       ---
     Total assets                                                                                $111,081                   $99,331
                                                                                                 ========                   =======

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

  Accounts payable                                                                                 $1,227                      $941
  Accrued expenses                                                                                 17,889                    15,012
  Income taxes payable                                                                                493                       505
  Current maturities of capital lease obligations                                                   1,186                     1,676
                                                                                                  -------                    -------
     Total current liabilities                                                                     20,795                    18,134

Capital lease obligations, net of current maturities                                                1,046                     1,828
Deferred income taxes                                                                               2,557                         -

Shareholders' equity:
Preferred Stock, par value $.01 per share,
  2,000,000 shares authorized, 0 shares issued
  and outstanding                                                                                       -                         -
Common Stock, voting, par value $.01 per share,
  35,000,000 shares authorized, 16,967,040 and
  16,699,874 shares issued in 2000 and 1999,
  respectively                                                                                        170                       167
Additional paid-in capital                                                                         94,863                    93,177
Treasury stock  (101,420 shares, at cost)                                                            (673)                     (673)
Accumulated deficit                                                                                (7,677)                  (13,302)
                                                                                                   -------                  -------
Total shareholders' equity                                                                         86,683                    79,369
                                                                                                 ---------                  -------
     Total liabilities and shareholders' equity                                                  $111,081                   $99,331
                                                                                                =========                   =======
</TABLE>
<PAGE>



                         BOSTON COMMUNICATIONS GROUP, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)
<TABLE>

                                                                         Three months ended                 Nine months ended
                                                                           September 30,                     September 30,
                                                                         2000            1999             2000               1999
                                                                         ----            ----             ----               ----
<S>                                                                       <C>            <C>               <C>                <C>

Revenues:
  Prepaid wireless services                                              $13,940           $9,115           $39,000         $26,718
  Roaming services                                                         4,556            5,956            13,952          17,124
  System sales                                                             4,803            2,673            13,113           8,329
  Eliminations                                                             (3,450)          (1,718)           (9,806)        (5,110)
                                                                           -------          -------           ------- -     -------
                                                                          19,849           16,026            56,259          47,061

Expenses:
  Cost of service revenues                                                 7,470            8,292            21,862          23,591
  Cost of system revenues                                                    449              728             1,570           2,326
  Cost of system revenues-one-time charge                                      -            1,824                 -           1,824
  Engineering, research and development                                    2,155            1,619             5,822           4,403
  Sales and marketing                                                      1,101            1,387             3,915           4,441
  General and administrative                                               1,658            1,716             5,092           4,667
  Depreciation and amortization                                            4,197            3,370            11,911           9,198
                                                                           -----            -----            ------           -----

Total operating expenses                                                  17,030           18,936            50,172          50,450
                                                                          ------           ------            ------          ------

Operating income (loss)                                                    2,819           (2,910)            6,087          (3,389)
Interest income                                                              499              227             1,312             748
                                                                             ---              ---             -----             ---
Income (loss) from continuing operations before income taxes
                                                                           3,318           (2,683)            7,399          (2,641)
Provision (benefit) for income taxes                                       1,194             (598)            2,951            (512)
                                                                           -----             -----            -----           -----
Income (loss) from continuing operations                                   2,124           (2,085)            4,448          (2,129)
Income (loss) from discontinued operations                                  586              (129)            1,177             767
                                                                            ---              -----            -----             ---
Net income (loss)                                                        $2,710           $(2,214)           $5,625         $(1,362)
                                                                         ======           ========           ======         ========

Basic net income (loss) per common share:
   Continuing operations                                                   $0.13           $(0.12)            $0.27          $(0.13)
                                                                           =====           =======            =====         =======
   Net income (loss)                                                       $0.16           $(0.13)            $0.34          $(0.08)
                                                                           =====           =======            =====          =======
   Weighted average common shares
   outstanding                                                            16,803           16,575            16,715          16,506
                                                                          ======           ======            ======          ======

Diluted net income (loss) per common share:
   Continuing operations                                                   $0.12           $(0.12)             $0.26         $(0.13)
                                                                           =====           =======             =====         =======
   Net income (loss)                                                       $0.15           $(0.13)              $0.32        $(0.08)
                                                                           =====           =======              =====        =======
   Weighted average common shares
   outstanding                                                            17,750           16,575              17,370        16,506
                                                                          ======           ======              ======        ======




</TABLE>

<PAGE>


                        BOSTON COMMUNICATIONS GROUP, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)

<TABLE>


                                                                                          Nine months ended
                                                                                            September 30,
                                                                                       2000              1999
                                                                                       ----              ----
<S>                                                                                     <C>              <C>

 OPERATING ACTIVITIES
  Income (loss)from continuing operations                                                $4,448           $ (2,129)
  Adjustments to reconcile net income (loss) to net
    cash provided by operating activities:
           Depreciation and amortization                                                 11,911              9,198
        Deferred income taxes                                                             3,726                  -
        One-time charge                                                                       -              1,824
        Changes in operating assets and liabilities:
              Accounts receivable                                                            62             (7,198)
              Inventory                                                                     973              1,343
              Prepaid expenses and other assets                                            (801)              (495)
              Accounts payable and accrued expenses                                       3,163              6,882
           Income taxes payable                                                             (12)               (10)
                                                                                            ----               ----
                                                                                         23,470              7,591
  Net income from discontinued operations                                                 1,177                767
  Adjustments to reconcile income from discontinued
    operations:
           Cash flow related to results of operations
                                                                                             61                746
                                                                                  ---        --                ---
                                                                                          1,238              1,513
                                                                                          -----              -----
  Net cash provided by operations                                                        24,708              9,104

  INVESTING ACTIVITIES
  Purchases of property and equipment                                                   (15,285)           (12,273)
  Sales of short-term investments                                                         9,879             13,897
  Purchases of short-term investments                                                    (8,859)           (15,822)
                                                                                         -------           --------

  Net cash used in investing activities                                                 (14,265)           (14,198)

  FINANCING ACTIVITIES
  Proceeds from exercise of stock options and employee
       stock purchase plan                                                                1,689              1,497
  Repayment of capital lease obligations                                                  (1,272)           (1,070)
                                                                                          -------           -------

  Net cash provided by financing activities                                                 417                427
                                                                                            ---                ---

  Increase (decrease) in cash and cash equivalents                                       10,860             (4,667)
  Cash and cash equivalents at beginning of period                                       21,145             18,523
                                                                                         ------             ------
  Cash and cash equivalents at end of period                                            $32,005           $ 13,856
                                                                                        =======           ========

  Supplemental disclosure of non-cash transactions:
  Capital lease obligations                                                                                  3,641

</TABLE>
<PAGE>



                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.     Basis of Presentation

       The accompanying  consolidated financial statements have been prepared by
       the Company,  without audit,  and reflect all  adjustments,  which in the
       opinion of management  are necessary for a fair  statement of the results
       of the  interim  periods  presented.  All  adjustments  were of a  normal
       recurring nature.  Certain information and footnote  disclosures normally
       included  in the  annual  consolidated  financial  statements,  which are
       prepared in accordance  with generally  accepted  accounting  principles,
       have been  condensed  or omitted in  accordance  with rules of the United
       States  Securities  and Exchange  Commission.  Accordingly,  although the
       Company   believes  that  the   disclosures  are  adequate  to  make  the
       information   presented  not  misleading,   the  consolidated   financial
       statements  should  be read in  conjunction  with  the  footnotes  to the
       Company's  audited  consolidated  financial  statements  contained in the
       Company's Form 10-K for the fiscal year ended December 31, 1999.

       The  preparation  of financial  statements in conformity  with  generally
       accepted accounting  principles 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  period.  Actual  results could differ
       from those estimates.

2.     Earnings Per Share

      The following  table sets forth the  computation  of basic and diluted net
      income per share (in thousands, except per share amounts):

<TABLE>

                                                                      Three months ended          Nine months ended
                                                                         September 30,               September 30
                                                                     2000           1999           2000           1999
                                                                     ----           ----           ----           ----
<S>                                                                   <C>            <C>            <C>            <C>
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Numerator for basic and diluted earnings per share:
Income (loss) from continuing operations                                  $2,124        $(2,085)        $4,448         $(2,129)
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Income (loss) from discontinued operations                                  $586          $(129)        $1,177            $767
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Net income                                                                $2,710        $(2,214)        $5,625         $(1,362)
(loss)
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Denominator:
Denominator for basic earnings per share - weighted average
shares                                                                    16,803         16,575         16,715         16,506
Effect of dilutive securities:  Employee stock
options                                                                      947              -            655              -
-------------------------------------------------------------------------------- -------------- -------------- --------------

Denominator for diluted earnings per share - adjusted weighted            17,750         16,575         17,370         16,506
    average shares and   assumed conversion
-------------------------------------------------------------------------------- -------------- -------------- --------------

Basic net income (loss) per common share:
Income (loss) from continuing operations                                   $0.13    $(0.12)              $0.27          $(0.13)
Income (loss) from discontinued operations                                 $0.03    $(0.01)              $0.07          $0.05
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Net income                                                                 $0.16    $(0.13)              $0.34          $(0.08)
(loss)
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Diluted net income (loss) per common share:
Income (loss) from continuing operations                                   $0.12    $(0.12)              $0.26          $(0.13)
Income (loss) from discontinued operations                                 $0.03    $(0.01)              $0.06          $0.05
------------------------------------------------------------------ -------------- -------------- -------------- --------------
Net income (loss)                                                          $0.15         $(0.13)         $0.32          $(0.08)
------------------------------------------------------------------ -------------- -------------- -------------- --------------
</TABLE>


3.     Inventory

       Inventories consisted of the following at (in thousands):

                           September 30,                December 31,
                                2000                        1999
                                -----                       -----
Purchased parts                 $631                        $ 1,356
Work-in-process                  403                            651
                                ----                           ----

                              $1,034                        $ 2,007
                              ======                        =======




4.     Segment Reporting

     Divisional Data
     (in thousands, except for percentages)

<TABLE>

                                         Prepaid
Three months ended                       Wireless
September 30,                            Services     Roaming Services     Systems        Eliminations          Total
------------------------------------- --------------- ----------------- -------------- -------------------- --------------
<S>                                         <C>             <C>                <C>            <C>                <C>

2000
Revenues                                     $13,940            $4,556         $4,803             $(3,450)        $19,849
Gross margin                                  10,190               836          2,246              (1,342)         11,930
Gross margin percentage                          73%               18%            47%                (39)%            60%
1999
Revenues                                      $9,115            $5,956         $2,673             $(1,718)         16,026
Gross margin                                   5,677             1,102          (929)                (668)          5,182
Gross margin percentage                          62%               19%          (35)%                (39)%            32%


                                         Prepaid
Nine months ended                        Wireless
September 30,                            Services     Roaming Services     Systems        Eliminations         Total
------------------------------------- --------------- ----------------- -------------- -------------------- -------------
<S>                                         <C>             <C>                <C>            <C>                <C>
2000
Revenues                                     $39,000           $13,952        $13,113             $(9,806)       $56,259
Gross margin                                  28,454             2,636          5,551              (3,814)        32,827
Gross margin percentage                          73%               19%            42%                (39)%           58%
1999
Revenues                                     $26,718           $17,124         $8,329             $(5,110)       $47,061
Gross margin                                  17,350             2,901          1,057              (1,988)        19,320
Gross margin percentage                          65%               17%            13%                (39)%           41%

</TABLE>
<PAGE>


5.    Discontinued Operations

      On  November  1, 2000,  the  Company  sold the assets of its  Teleservices
      Division  for  approximately  $15  million,  including a $13 million  cash
      payment and assumption by the acquirer of $2 million in liabilities. Under
      the terms of the agreement,  the Company will also receive additional cash
      payments,  totaling up to an  additional  $20  million  over the next five
      years,  based upon  achievement of  predetermined  revenue  targets.  As a
      result of this sale, the Teleservices  Division results have been recorded
      as discontinued operations for all periods presented.

      The assets held for sale include  $4.1  million in equipment  and software
      and $1.8 million in prepaid assets and deposits, offset by $2.1 million in
      liabilities.

      The operating results from the discontinued operation were as follows:
<TABLE>

                                                      Three months ended              Nine months ended
                                                         September 30,                 September 30,
                                                       2000            1999             2000            1999
                                                       ----            ----             ----            ----
<S>                                                     <C>             <C>             <C>              <C>

 Revenues                                             $7,528        $10,088            $22,050        $30,638
                                                       ======        =======            =======        =======
  Income (loss) before tax                                916           (214)             1,953          1,279
  Income tax (benefit) expense                            330            (85)               776            512
                                                          ---            ----               ---            ---
  Net income (loss) from
  discontinued operations                                $586          $(129)            $1,177           $767
                                                         ====          ======            ======           ====
</TABLE>


6.        One-Time Charge

      In September 1999, the Company  recorded a one-time charge of $1.8 million
      as a result of the  reorganization  of the  Systems  Division.  The charge
      primarily  relates to expenses  associated with the  reorganization of the
      Systems Division including inventory write-downs and severance.

7.  Recent Accounting Pronouncements

      In December  1999, the  Securities  and Exchange  Commission  (SEC) issued
      Staff  Accounting  Bulletin  (SAB) 101,  Revenue  Recognition in Financial
      Statements.  SAB 101 clarifies the SEC staff's views on applying generally
      accepted  accounting   principles  to  revenue  recognition  in  financial
      statements.  In March 2000, the SEC issued an amendment,  SAB 101A,  which
      deferred the  effective  date of SAB 101. In June 2000,  the SEC issued an
      amendment,  SAB 101B,  which again deferred the effective date of SAB 101.
      The Company will adopt SAB 101 in the fourth quarter of 2000 in accordance
      with the  amendment.  The  adoption of this SAB is not  expected to have a
      significant impact on the Company's financial statements.

<PAGE>


         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

Consolidated Results of Operations

The Company's  total revenues  increased 24% from $16.0 million to $19.8 million
for the three months ended  September 30, 1999 and 2000,  and increased 20% from
$47.1 million to $56.3 million for the nine months ended  September 30, 1999 and
2000.  During the three and nine month  periods,  the increases  were  primarily
attributable  to 53% and 46% increases in prepaid  wireless  services  revenues,
which were partially  offset by decreases in roaming  services  revenues in both
periods. In 2000, for internal financial  reporting purposes,  the Company began
reporting  interdivision sales from the Systems Division to the Prepaid Services
Division for voice nodes, known as V-nodes, and related equipment shipped during
the quarter. Prior year amounts have been reclassified to permit comparison.


The Company  generated  operating income of $2.8 million during the three months
ended  September 30, 2000 compared to an operating  loss of $2.9 million for the
same period in the prior year. For the nine months ended September 30, 2000, the
Company generated operating income of $6.1 million compared to an operating loss
of $3.4 million for the same period in 1999. The operating loss during the three
and nine months ended  September  30, 1999  included  the $1.8 million  one-time
charge due to the  reorganization  of the Systems  Division.  The  increases  in
operating income resulted from  improvements in the operating results of prepaid
wireless  services  and,  to a lesser  extent,  to  improvements  in the Systems
Division.  The  specifics  of each  division's  revenues  and gross  margins are
discussed in greater detail below.

Prepaid Wireless Services Division

Prepaid Wireless Services  Division revenues  increased 53% from $9.1 million to
$13.9  million for the three  months  ended  September  30,  1999 and 2000,  and
increased  46% from $26.7  million to $39.0  million for the nine month  periods
ended September 30, 1999 and 2000. The increases were primarily due to increased
numbers  of  subscribers  and  greater  minutes  of use,  partially  offset by a
decrease in the average  price per minute as carriers  avail  themselves  of our
volume discounts. As of September 30, 2000, there were approximately 2.7 million
prepaid subscribers on the Company's  Intelligent Voice Services Network,  known
as the IVSN,  compared to 1.5 million  subscribers  at September  30,  1999,  an
increase of 80%. The Company expects the average price per minute to continue to
decline as  carriers  grow their  subscriber  bases and  continue to utilize our
volume discounts.

Gross margins for the Prepaid Wireless  Services  Division  improved from 62% to
73% for the three months ended  September 30, 1999 and 2000,  respectively,  and
<PAGE>


from 65% to 73% for the nine  months  ended  September  30,  1999 and 2000.  The
improvement  resulted from higher revenues compared to our relatively fixed cost
structure,  along  with  continued  management  focus  on  effectively  managing
expenses.


Going forward,  we expect that the seasonal trends  experienced in 1999 and 2000
for subscriber additions,  churn and average minutes of use will continue,  with
the growth in fourth and first  quarters  showing  stronger usage and subscriber
trends  than the slower  seasons in the  second  and the third  quarters.  These
trends have typically resulted from increased carrier focus on holiday marketing
promotions.

Roaming Services Division

Roaming  services  revenues  decreased 23% from $6.0 million to $4.6 million for
the three months ended September 30, 1999 and 2000, and decreased 18% from $17.1
million to $14.0 million for the nine months ended  September 30, 1999 and 2000.
The decrease in roaming services revenues in 2000 was primarily  attributable to
fewer  suspensions  of  inter-carrier  automatic  roaming  agreements  and  some
reduction of unregistered  roaming use  attributable to prepaid wireless growth.
In addition,  demand for the Company's roaming service,  whose premium rates are
essentially  determined by the Company's carrier  customers,  has been adversely
affected  by an increase  in lower  priced  one-rate  registered  roaming  plans
offered by some national  carriers.  The Company  anticipates  that these trends
will  continue  and,  therefore,  roaming  services  revenues  will  continue to
decrease at similar rates over time as compared to prior periods.

Gross margins for the Roaming  Services  Division  decreased  from 19% to 18% of
roaming  services  revenues for the three months  ended  September  30, 1999 and
2000,  and increased from 17% to 19% of roaming  services  revenues for the nine
month period ended  September 30, 1999 and 2000. The decrease in the three-month
period  was due to lower  revenues  while the fixed  costs  associated  with the
service remained.  The increase for the nine-month period was primarily a result
of management's  efforts to reduce costs.  The Company  anticipates that margins
will continue to decrease as revenues decline.

Systems Division

In  2000,  the  Company  began  reporting   interdivision  revenues  (which  are
eliminated in  consolidation)  to the Prepaid Services  Division for V-nodes and
related  equipment  deployed  during  the year.  Prior  year  amounts  have been
reclassified  to permit  comparison.  Systems  revenues  increased 78% from $2.7
million  in the third  quarter of 1999 to $4.8  million in the third  quarter of
2000 and increased 58% from $8.3 million for the nine months ended September 30,
1999 to $13.1  million  for the same  period in 2000.  The  increase in revenues
reflects increased shipments of interdivision  prepaid V-nodes along with higher
sales of systems and recurring  services both domestically and  internationally.
Interdivision  revenues for the three and nine-month  periods were significantly
higher  in 2000  due to the  continued  build-out  of the  IVSN to  support  the

<PAGE>

Company's  growth in prepaid,  particularly  related to the Company's  agreement
signed in October,  2000 with Verizon  Wireless to support their National Prepay
Wireless program.

Gross margins for the Systems  Division  increased  from (35%) to 47% of systems
revenues for the three months ended  September 30, 1999 and 2000,  and increased
from 13% to 42% of systems revenues for the nine months ended September 30, 1999
and 2000. The increases  resulted from management's  continued  execution on its
1999  reorganization to reduce costs and generate  additional  recurring revenue
allowing for greater absorption of fixed costs.

                                 Operating Data
<TABLE>

                                                                        2000                         1999
------------------------------------------------------------
Three months ended September 30,                                            % of Total                    % of Total
($ in thousands)                                             Total           Revenues        Total         Revenues
------------------------------------------------------------ ------------ -------------- -------------- --------------
<S>                                                             <C>              <C>            <C>             <C>

Total revenues                                                   $19,849           100%        $16,026           100%
------------------------------------------------------------
Engineering, research and development                              2,155            11%          1,619            10%
------------------------------------------------------------
Sales and marketing                                                1,101             6%          1,387             9%
------------------------------------------------------------
General and administrative                                         1,658             8%          1,716            11%
------------------------------------------------------------
Depreciation and amortization                                      4,197            21%          3,370            21%
------------------------------------------------------------



                                                                        2000                         1999
------------------------------------------------------------
Nine months ended September 30,                                             % of Total                    % of Total
($ in thousands)                                             Total           Revenues       Total          Revenues
------------------------------------------------------------ ------------ -------------- ------------- ---------------
<S>                                                             <C>              <C>            <C>             <C>
Revenues                                                         $56,259           100%       $47,061            100%
------------------------------------------------------------
Engineering, research and development                              5,822            10%         4,403              9%
------------------------------------------------------------
Sales and marketing                                                3,915             7%         4,441              9%
------------------------------------------------------------
General and administrative                                         5,092             9%         4,667             10%
------------------------------------------------------------
Depreciation and amortization                                     11,911            21%         9,198             20%
------------------------------------------------------------
</TABLE>


Engineering, research and development expenses

Engineering,  research and development  expenses  primarily include the salaries
and benefits for software development and engineering  personnel associated with
the  development,  implementation  and maintenance of existing and new services.
Engineering,  research and  development  expenses  increased  from 10% to 11% of
revenues for the quarters ended  September 30, 1999 and 2000, and from 9% to 10%
of revenues for the nine months ended September 30, 1999 and 2000. The increases
primarily resulted from additional  resources devoted to expanding and enhancing
the features and  functionality  of the Company's IVSN, in addition to resources
devoted to the Company's m-commerce initiatives.

Sales and marketing expenses
<PAGE>

Sales and  marketing  expenses  include  direct  sales,  marketing  and  product
management salaries,  commissions, travel and entertainment expenses, as well as
the cost of trade shows and other promotional expenses. As a percentage of total
revenues,  sales  and  marketing  expenses  decreased  from  9%  to 6%  for  the
three-month  periods ended September 30, 1999 and 2000, and decreased from 9% to
7% for the nine month periods ended September 30, 1999 and 2000 as the Company's
sales  organization  was  reorganized  into one group to centralize  efforts and
leverage resources.

General and administrative expenses

General and  administrative  expenses include salaries and benefits of employees
and expenses for other administrative  support services provided to the Company.
General and administrative expenses decreased from 11% of total revenues for the
three months ended  September 30, 1999 to 8% in the three months ended September
30, 2000. General and administrative  expenses decreased from 10% to 9% of total
revenues for the  nine-month  periods  ended  September  30, 1999 and 2000.  The
decreases  resulted  from a fairly  consistent  level of costs and  personnel to
support the Company's operations while revenues were increasing.

Depreciation and amortization expense

Depreciation    and    amortization    expense    includes    depreciation    of
telecommunications  systems,  furniture  and  equipment,  building and leasehold
improvements.  The Company  provides for  depreciation  using the  straight-line
method over the estimated useful lives of the assets,  which range from three to
twenty years.  Goodwill  related to  acquisitions is amortized over eight years.
Depreciation  and  amortization  expense  remained  consistent  at 21% of  total
revenues for the three months ended  September  30, 1999 and 2000 and  increased
from 20% to 21% of total  revenues for the nine months ended  September 30, 1999
and 2000. The increase in absolute dollars for both periods was primarily due to
the depreciation of additional  technical  equipment and software to support the
rapid  expansion  and  enhancement  of  the  Company's  IVSN.  Depreciation  and
amortization  expenses  are  expected to  increase  in  absolute  dollars due to
increased  capital  expenditures for  telecommunications  hardware and software,
primarily  related to new prepaid features and  functionality  and the continued
enhancement and expansion of the IVSN.

Interest income

Interest  income  increased from $227,000 to $499,000 for the three months ended
September  30, 1999 and 2000,  and from  $748,000  to $1.3  million for the nine
month periods ended  September 30, 1999 and 2000. The Company's  interest income
increased  in 2000 due to  significant  increases  in cash flow  generated  from
operations.

Provision (benefit) for income taxes
<PAGE>

Income tax expense of $1.2 million and $3.0 million for the three and nine month
periods  ended  September  30, 2000  yielded a 36% and 40% income tax rate.  The
Company's  effective  income tax rate for the three months ended  September  30,
2000 is less than the  statutory  rate of 40% due the  Company's  reversal  of a
valuation  allowance  against the deferred  tax asset  resulting  from  improved
profitability.  The  Company's  effective  income  tax  rate is  expected  to be
approximately  36% in the fourth  quarter of 2000 and may be greater than 40% in
2001 and beyond due to the continued impact of non-deductible goodwill.

Income (loss) from discontinued operations

Income (loss) from discontinued operations increased from a loss of $129,000 for
the three  months  ended  September  30, 1999 to income of $586,000 in the three
months ended  September 30, 2000 and from income of $767,000 to $1.2 million for
the nine month periods ended  September 30, 1999 and 2000.  The increase in 2000
was due to  improved  cost  management  of the  Teleservices  business  and to a
software problem that caused the loss in the three-month  period ended September
30, 1999.


Liquidity and Capital Resources

Cash, cash equivalents and short-term  investments  increased from $30.2 million
at December 31, 1999 compared to $40.1  million at September 30, 2000.  Net cash
provided by operations of $24.7 million for the nine months ended  September 30,
2000 resulted primarily from $4.4 million of net income,  along with adjustments
of $3.7 million for deferred income taxes and $11.9 million in depreciation  and
amortization  expense.  The increase in accounts payable and accrued expenses of
$3.2 million resulted from the timing of payments.

The Company's investing activities utilized $14.3 million of net cash during the
nine-month period ended September 30, 2000,  primarily for purchases of property
and   equipment.   These   capital   additions   include   $13.4   million   for
telecommunications systems equipment and software for expansion of the Company's
IVSN. The Company also made $1.0 million in purchases of short-term investments,
net of sales,  during the nine-month period.  The Company  anticipates that over
the next 12 months it will continue to make significant  capital investments for
additional  equipment,  to improve  redundancy  and  reliability,  and  enhanced
feature capabilities for the IVSN.

The Company's  financing  activities  generated  $417,000 in net cash during the
nine months ended September 30, 2000, due to proceeds from the exercise of stock
options, partially offset by payments of capital lease obligations.

The Company believes that its cash and cash equivalents,  short-term investments
and the funds  anticipated to be generated from operations will be sufficient to
finance the Company's operations for at least the next 12 months.
<PAGE>

Certain Factors That May Affect Future Results

This Quarterly Report contains forward-looking statements that involve risks and
uncertainties, including, without limitation, statements regarding the continued
decline in Prepaid  Wireless per minute rates as carriers grow their  subscriber
bases  and  utilize  volume  discounts,  seasonal  trends  in  Prepaid  Wireless
revenues, the trend of decreased suspensions of inter-carrier  automatic roaming
agreements,  prepaid services causing the reduction of unregistered  roaming and
carriers  marketing one-rate  registered roaming plans that reduce  unregistered
roaming  service  revenues,  greater  costs of  depreciation  and  amortization,
increased interest income and an effective income tax rate greater than 40%. The
Company's actual results may differ  significantly from the results discussed in
the forward-looking  statements.  A number of important factors exist that could
affect the Company's future operating results,  including,  without  limitation,
system  outages that reduce  revenues,  technological  changes in the  Company's
industry,  the ability of the Company to  continue to  successfully  support its
IVSN, the ability of the Company's carrier customers to successfully continue to
market and sell  prepaid  wireless  services,  the  Company's  ability to retain
existing customers and attract new customers,  increased competition and general
economic factors.

The Company  recently  announced that it has sold the assets of its Teleservices
Division.  This transaction  includes potential  additional cash payments to the
Company  of  up  to  $20  million  through  2005,   based  upon  achievement  of
predetermined revenue targets.  There can be no assurances that the Company will
be successful in meeting the predetermined revenue targets or earning any of the
potential cash payments available.

The Company is exploring  opportunities to utilize its IVSN and real-time rating
engine for mobile commerce  applications.  There can be no assurances that there
will be a market for the Company's network in the mobile and electronic commerce
arena. In addition,  this market could be so highly competitive that the Company
may not be able to enter it.

Historically,  a significant portion of the Company's revenues in any particular
period  have  been   attributable  to  a  limited  number  of  customers.   This
concentration  of  customers  can cause the  Company's  revenues and earnings to
fluctuate from quarter to quarter, based on the volume of call traffic generated
through these customers,  and the level of system sales. A significant  decrease
in business from any of the Company's major  customers,  including a decrease in
business due to factors outside of the Company's control,  would have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.

Certain Prepaid Wireless services contracts are beyond their expiration dates or
will expire in 2000 and 2001.  There can be no assurances  that the Company will
be successful  in renewing any of these  contracts.  If these  contracts are not
renewed,  the Company's business,  financial condition and results of operations
<PAGE>

could be  materially  adversely  affected.  Also,  when and if the contracts are
renewed, some contractual rates per minute will likely be lower than in previous
years.  If  subscriber  levels  begin to drop off,  revenue  could be  adversely
affected due to these lower rates.

The Company's quarterly operating results may vary significantly  depending on a
number of factors, including the timing of the introduction or acceptance of new
services  offered  by the  Company  or its  competitors,  changes  in the mix of
services  provided  by the  Company,  variations  in the level of system  sales,
changes in regulations affecting the wireless industry, changes in the Company's
operating expenses, the ability to identify, hire and retain qualified personnel
and general  economic  conditions.  Due to all of the foregoing  factors,  it is
possible that in some future quarter the Company's results of operations will be
below prior results or the expectations of public market analysts and investors.
In such  event,  the  price  of the  Company's  Common  Stock  would  likely  be
materially and adversely affected.

In September 1999 a reorganization  plan was implemented in an effort to realign
the Systems  Division  and reduce  operating  expenses.  The Company has reduced
operating  expenses  and  stabilized  the  division,  however  there  can  be no
assurances   that   the   Systems   Division's   operating   losses   (excluding
Interdivisional  revenues)  will  not  increase  or  that  it  may  incur  asset
impairment  charges or other  write-offs  that could  materially  and  adversely
affect  the  Company's  overall   business,   operating  results  and  financial
condition.

The Company  historically  has  provided  its  services  almost  exclusively  to
wireless  carriers.   Although  the  wireless   telecommunications   market  has
experienced  significant  growth in recent years, there can be no assurance that
such growth will continue at similar rates, or at all, or that wireless carriers
will continue to use the Company's services. The Company expects that demand for
its roaming  services  will continue to decline as fewer  inter-carrier  roaming
agreements are suspended,  prepaid services  replacement of unregistered roaming
use  increases  and carriers  offer more one-rate  roaming  plans.  In addition,
prepaid  wireless  services are relatively  new services in new markets,  and if
these markets do not grow as expected or if the carriers in these markets do not
use the Company's  services,  the Company's  business,  financial  condition and
results of operations would be materially and adversely affected.

The Company's future success depends, in large part, on the continued use of its
existing  services and systems,  the  acceptance of new services in the wireless
industry and the Company's  ability to develop new services and systems or adapt
existing services or systems to keep pace with changes in the wireless telephone
industry. Further, a rapid shift away from the use of wireless in favor of other
services  could affect  demand for the  Company's  service  offerings  and could
require the Company to develop  modified or  alternative  service  offerings  to
<PAGE>

address the particular needs of the providers of such new services. There can be
no assurance  that the Company will be successful in developing or marketing its
existing or future service offerings or systems in a timely manner, or at all.

The Company is currently devoting  significant  resources toward the support and
enhancement  of its prepaid  wireless  services  and systems to maintain  system
reliability  and expand the IVSN. The Company has  experienced  network  outages
that  result in  reductions  in  revenue  in  accordance  with  penalty  clauses
contained  in  certain  of the  Company's  carrier  customer  contracts.  If the
Company's  future  efforts to avoid outages are  unsuccessful,  such outages can
result in  additional  lost  revenue for the  Company  and damage the  Company's
reputation.  The occurrence of one or more outages could have a material adverse
effect on the Company's business, operating results and financial condition.

There can be no assurance that the Company will successfully support and enhance
the IVSN effectively to avoid system outages and any associated loss in revenue,
that the market for the Company's  prepaid service will continue to develop,  or
that the Company's  IVSN will  successfully  support  current and future growth.
Furthermore,  the Company has expended significant amounts of capital to support
the prepaid  agreements  it has  secured  with its  carrier  customers.  Because
prepaid revenues are principally generated by prepaid subscriber minutes of use,
these revenues can be effected by the carrier's  ability to successfully  market
and sell prepaid services. Revenues from the Company's IVSN are dependent on the
ability to retain  subscribers on the network and there can be no assurance that
the Company's churn rate (percentage of total subscribers that terminate service
on the network) will not increase,  which may result in reductions in subscriber
growth and related revenues.

The Company has expanded its operations rapidly, creating significant demands on
the Company's administrative,  operational,  development and financial personnel
and other resources.  Additional expansion by the Company may further strain the
Company's management,  financial and other resources.  There can be no assurance
that the  Company's  systems,  procedures,  controls and existing  space will be
adequate to support  expansion of the  Company's  operations.  If the  Company's
management is unable to manage growth effectively,  the quality of the Company's
services,  its  ability  to retain key  personnel  and its  business,  financial
condition and results of operations could be materially and adversely affected.

The Company's  operations are supported by many hardware components and software
applications  from third party  vendors.  There can be no assurances  that these
hardware  components and software  applications will function in accordance with
specifications  agreed upon by the Company and its vendors.  If the hardware and
software  do not  function  as  specified,  the  Company's  business,  financial
condition and results of operations could be materially and adversely affected.

All products  sold to  international  customers are priced in U.S.  dollars.  In
addition,  many Systems Division  customers are multinational  corporations that


<PAGE>

are publicly traded in the U.S. All payments are received in U.S.  dollars which
helps to protect the Company  from the need to hedge  against  foreign  currency
risk.  While  these  provisions  serve to  protect  the  Company  from  accounts
receivable  losses,  there can be no  assurances  that systems  sales to foreign
countries will not result in losses due to devaluation of foreign  currencies or
other international business conditions outside of the Company's control.

The market for services to wireless  carriers is highly  competitive and subject
to rapid  change.  A number  of  companies  currently  offer  one or more of the
services  offered by the  Company.  In  addition,  many  wireless  carriers  are
providing or can provide,  in-house,  the services that the Company  offers.  In
addition,  the  Company  anticipates  continued  growth and  competition  in the
wireless  carrier  services  industry  and  consequently,  the  entrance  of new
competitors  in the future.  An increase in  competition  could  result in price
reductions and loss of market share and could have a material  adverse effect on
the Company's business, financial condition or results of operations.

The  Company's  success and ability to compete  are  dependent  in part upon its
proprietary  technology.  In  addition,  the  Company  continues  to defend  its
proprietary  technology against patent  infringement  litigation,  including the
Freedom Wireless lawsuit. If patent  infringement  judgments are entered against
the Company or unauthorized  copying or misuse of the Company's  technology were
to occur to any substantial degree, the Company's business,  financial condition
and results of operations could be materially adversely affected.

Some of the software used to support the  Company's  services is licensed by the
Company  from  single  vendors,  which are small  corporations.  There can be no
assurance  that these  suppliers  will  continue to license this software to the
Company or, if any supplier terminates its agreement with the Company,  that the
Company  will be able to develop or  otherwise  procure  software  from  another
supplier on a timely basis and at commercially acceptable prices.

The Company's  operations are dependent on its ability to maintain its computer,
switching  and other  telecommunications  equipment  and  systems  in  effective
working  order and to protect its  systems  against  damage  from fire,  natural
disaster, power loss,  telecommunications failure or similar events. Any damage,
failure or delay that causes  interruptions  in the Company's  operations  could
have a material adverse effect on the Company's  business,  financial  condition
and results of operations



Item 3.  Quantitative and Qualitative Disclosures About Market Risk

All products  sold to  international  customers are priced in U.S.  dollars.  In
addition,  many Systems Division  customers are multinational  corporations that
are publicly traded in the U.S. All payments are received in U.S.  dollars which
helps to protect the Company  from the need to hedge  against  foreign  currency
<PAGE>

risk.  While  these  provisions  serve to  protect  the  Company  from  accounts
receivable  losses,  there can be no  assurances  that systems  sales to foreign
countries will not result in losses due to devaluation of foreign  currencies or
other international business conditions outside of the Company's control.



PART II.  OTHER INFORMATION:

Item 1.  Legal Proceedings

On March 30, 2000, Freedom Wireless, Inc. filed a complaint in the United States
District Court for the Northern District of California against the Company and a
number of wireless  carriers,  including  customers and former  customers of the
Company.  The suit alleges that the defendants infringe a patent held by Freedom
Wireless, Inc. and seeks injunctive relief and damages in an unspecified amount.
The Company does not believe it infringes  this patent and believes  that it has
meritorious defenses to the action.


Item 6.  Exhibits and Reports on Form 8-K


                  a) Exhibits

                      The  exhibits  listed in the Exhibit  Index are part of or
                      included in this report.

                  b) Reports on Form 8-K

                     NONE


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.

        Boston Communications Group, Inc.
        (Registrant)


        Date: November 8, 2000      By:     /s/ Karen A. Walker
                                            -------------------
                                            Karen A. Walker
                                            Vice President, Financial
                                            Administration and Chief
                                            Financial Officer (Principal
                                            Financial Accounting Officer and
                                            Duly Authorized Officer)
<PAGE>


                                INDEX TO EXHIBITS

Exhibit No.                Description


10.60                      Cummings Lease Amendment

27                         Financial Data Schedule