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The Company's preliminary average revenue per unit ("ARPU") at December 31, 2010 was $29.25, a 2% decrease over the year ended September 30, 2010 of $29.82, due mainly to the difference in non-recurring HD upgrade subsidy between the periods. The Company believes that its recurring revenue and ARPU will be positively impacted by (i) an increasing DIRECTV ARPU (the average revenue generated by a DIRECTV subscriber was up 4.3% in DIRECTV's third fiscal quarter to $88.98 (as disclosed in DIRECTV's public filings), (ii) an increasing ARPU generated from the sale of incremental high-speed Internet services to the Company's subscribers, (iii) a general increase in recurring revenue realized from the upgrade of properties to the new DIRECTV HD platform and the associated advanced services, and (iv) an increase in the total number of DIRECTV Choice and Exclusive subscribers that produce a higher ARPU relative to certain other types of subscribers.

The Company implemented a number of initiatives that began to take hold during the first fiscal quarter ended December 31, 2010 designed to improve EBITDA (as adjusted) and reduce reliance on debt financing. In particular, the Company (i) accelerated the closing and transition of the remaining ATTVS properties, (ii) signed and launched the DIRECTV CapEx program (described below), (iii) initiated price increases and introduced new pricing bundles for video and broadband services across multiple properties, (iv) developed and launched its new online web portal for subscribers to manage and pay their accounts online thereby eliminating the costs associated with mailings and collections, (v) developed and launched robust premium priced broadband services and tiers to several of its high-speed Internet properties, (vi) negotiated direct cost reductions for video and broadband services thereby improving gross margins derived from existing properties and subscribers, (vii) re-packaged its monthly video subscriber access fee into a "Customer Protection Plan" fee requiring annual pre-payment or monthly auto-payment (eliminating time and costs and reducing bad debt exposure), (viii) implemented a $0.99 monthly mailed statement fee to increase revenues from approximately 35,000 current subscribers, (ix) developed an independent contractor national rate card for subcontracted construction and installation services at a significant cost savings, and (x) instituted cost-saving changes (and service level increases) to its call center structure and technology to provide more efficient and cost-effective call routing solutions.

To reduce capital spending, but still concentrate on growth, on November 10, 2010 the Company executed the DIRECTV CapEx Agreement, which allows the Company to leverage its existing infrastructure to provide services to DIRECTV for the deployment of services to certain multi-family properties identified by the Company, but where DIRECTV (instead of the Company) becomes the party to the right of entry agreement. Once a property is identified by the Company, is under contract with DIRECTV and the satellite system constructed and activated, the Company earns fees from DIRECTV by providing certain services, including (i) activation fees generated from new subscription sales to residents in the property, and (ii) an ongoing percentage of the revenue generated by that subscriber as a management fee. The CapEx Agreement reduces the Company's capital costs for certain subscriber growth areas – a pivotal option when capital, or the cost of capital, is prohibitive. The Company's current DIRECTV System Operator Agreement and the new CapEx Agreement are mutually exclusive of each other. Prior to offering a property to DIRECTV, the Company retains sole discretion as to whether it decides to build out and maintain ownership of a property or simply provide ongoing management, sales, service and maintenance for DIRECTV. The Company currently has 10 properties pending under this program.

In addition to improving financial results, the Company is continuing negotiations and due diligence with two companies that it deems significant strategic acquisition/merger prospects. Both companies have a significant presence in the multi-family space and collectively have in excess of 70,000 subscribers as well as strong broadband capabilities. To assist with strategic planning and the potential financing associated with any acquisition or merger, the Company has retained and sought the advice of New York investment bank Morgan Joseph & Co. Through the efforts of Morgan Joseph & Co., the Company has executed a term sheet for a combined debt and equity financing of up to $10.25 million with the net proceeds to be used for one of the above-mentioned acquisitions should terms be reached. Similarly, the Company continues to assess its core and non-core service areas and has identified certain assets in non-core markets that may be considered for sale. To that end, the Company is preliminarily engaged with several parties regarding interest for the sale of these assets at prices similar to what the Company has previously received. The Company makes no representations that these acquisition/merger, financing or sale negotiations will result in any closed transactions.

At the Company's 2010 Annual General Meeting, the stockholders authorized the Board of Directors to effect a reverse stock split, at a ratio to be determined by the Board of Directors, within a range from 1-for-5 to 1-for-10, and to reduce the current authorized number of shares of common stock from 70 million shares to 35 million shares. The Board of Directors proceeded with this authorization effective December 9, 2010 and the Company's stock began trading on a 1-for-10 basis on December 14, 2010.

The Company expects to file its quarterly report on Form 10-Q for the three months ended December 31, 2010 with the Securities and Exchange Commission on or before February 14, 2011. The Company will be hosting a conference call today at 10:00 am EST to discuss these results. Specific information will be provided via the Company's web site at [ www.mduc.com ].

The following table reconciles the comparative EBITDA (as adjusted) of the Company to its consolidated net loss as computed under accounting principles generally accepted in the United States of America:

	For The Three Months Ended December 31,
	2010		2009
EBITDA	$	1,028,722	$	461,328
Interest expense	(638,258)		(472,520)
Deferred finance costs and debt discount amortization (interest expense)	(84,315)		(71,815)
Provision for doubtful accounts	(135,177)		(99,265)
Depreciation and amortization	(1,865,272)		(1,680,270)
Share-based compensation expense - employees	(12,189)		(12,512)
Compensation expense for issuance of common stock through Employee Stock Purchase Plan	(746)		—
Compensation expense through the issuance of restricted common stock for services rendered	—		(12,000)
Net Loss	$	(1,707,235)	$	(1,887,054)

MDU COMMUNICATIONS INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
December 31, 2010 (Unaudited) and September 30, 2010 (See Note 1)

	December 31,		September 30,
	2010		2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	106,458	$	324,524
Accounts and other receivables, net of an allowance of $1,032,338 and $913,786	1,609,834		1,470,401
Prepaid expenses and deposits	532,015		645,719
TOTAL CURRENT ASSETS	2,248,307		2,440,644
Telecommunications equipment inventory	748,432		843,082
Property and equipment, net of accumulated depreciation of $29,343,399 and $28,240,886	22,244,399		22,696,096
Intangible assets, net of accumulated amortization of $7,706,039 and $7,417,568	2,503,534		2,470,875
Deposits, net of current portion	64,500		64,450
Deferred finance costs, net of accumulated amortization of $1,007,692 and $934,449	315,757		339,000
TOTAL ASSETS	$	28,124,929	$	28,854,147
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable	$	3,313,405	$	2,698,920
Other accrued liabilities	1,704,023		1,793,951
Current portion of deferred revenue	1,219,036		661,903
TOTAL CURRENT LIABILITIES	6,236,464		5,154,774
Deferred revenue, net of current portion	161,741		186,021
Credit line borrowing, net of debt discount	22,963,223		23,060,026
TOTAL LIABILITIES	29,361,428		28,400,821
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY)
Preferred stock, par value $0.001; 5,000,000 shares authorized, none issued	—		—
Common stock, par value $0.001; 35,000,000 shares authorized, 5,397,582 and 5,395,717 shares issued and 5,380,140 and 5,378,275 outstanding	5,398		5,396
Additional paid-in capital	61,484,866		61,467,458
Accumulated deficit	(62,658,439)		(60,951,204)
Less: Treasury stock; 17,442 shares	(68,324)		(68,324)
TOTAL STOCKHOLDERS' EQUITY (DEFICIENCY)	(1,236,499)		453,326
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)	$	28,124,929	$	28,854,147

See notes to the unaudited condensed consolidated financial statements contained in the Company's
Quarterly Report on Form 10-Q for the period ended December 31, 2010

MDU COMMUNICATIONS INTERNATIONAL, INC.
Condensed Consolidated Statements of Operations
Three Months Ended December 31, 2010 and 2009
(Unaudited)

	Three Months Ended December 31,
	2010		2009
REVENUE	$	6,724,728	$	6,413,866
OPERATING EXPENSES
Direct costs	2,973,285		2,889,859
Sales expenses	344,223		525,941
Customer service and operating expenses	1,479,372		1,480,089
General and administrative expenses	1,063,673		1,180,581
Depreciation and amortization	1,865,272		1,680,270
Gain on sale of customers and plant and equipment	(16,416)		—
TOTALS	7,709,409		7,756,740
OPERATING LOSS	(984,681)		(1,342,874)
Other income (expense)
Interest income	19		155
Interest expense	(722,573)		(544,335)
NET LOSS	$	(1,707,235)	$	(1,887,054)
BASIC AND DILUTED LOSS PER COMMON SHARE	$	(0.32)	$	(0.35)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING	5,379,897		5,332,288

See notes to the unaudited condensed consolidated financial statements contained in the Company's Quarterly Report on Form 10-Q for the period ended December 31, 2010

About MDU: MDU Communications International, Inc. (OTCBB:MDTV) is a leading provider of premium communication/information services, including digital satellite television and high-speed (broadband) Internet services, exclusively to the United States multi-dwelling unit (MDU) marketplace - estimated to include 26 million residences. Through its wholly owned subsidiary, MDU Communications (USA) Inc., MDU Communications delivers DIRECTV digital satellite television services and high-speed (broadband) Internet systems and is committed to delivering the next generation of interactive communication services to MDU residents. For additional information, please see [ www.mduc.com ] or contact Investor Relations.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements relating to financial information, property upgrades, strategic partner relationships, subscriber sales, acquisitions, subscriber and revenue growth, implementation of new programs and other developments of the Company. Such statements involve risks and uncertainties which may cause results to differ materially from those set forth in these statements, including, but not limited to, changes in financial condition, efforts on behalf of the Company to finalize and deploy certain programs and close certain acquisitions or sales, fluctuations in operating results and operating plans, deployment of new subscriber growth plans and conversion of existing subscribers, market forces, supplier negotiations, implementation of cost-saving plans and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission, including, but not limited to, the Company's 10-K for the year ended September 30, 2010, filed on or about December 21, 2010.

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