diff --git a/src/gsm/gsm48_ie.c b/src/gsm/gsm48_ie.c
index 59f931b..31028ba 100644
--- a/src/gsm/gsm48_ie.c
+++ b/src/gsm/gsm48_ie.c
@@ -82,6 +82,7 @@
 {
 	uint8_t in_len;
 	int i;
+	bool truncated = false;
 	if (output_len < 1)
 		return -ENOSPC;
 	*output = '\0';
@@ -94,14 +95,23 @@
 
 	for (i = 1 + h_len; i <= in_len; i++) {
 		/* lower nibble */
-		if (output_len <= 1)
+		if (output_len <= 1) {
+			truncated = true;
 			break;
+		}
 		*output++ = bcd_num_digits[bcd_lv[i] & 0xf];
 		output_len--;
 
 		/* higher nibble */
-		if (output_len <= 1)
+		if (output_len <= 1) {
+			/* not truncated if there is exactly one 0xf ('\0') higher nibble remaining */
+			if (i == in_len && (bcd_lv[i] & 0xf0) == 0xf0) {
+				break;
+			}
+
+			truncated = true;
 			break;
+		}
 		*output++ = bcd_num_digits[bcd_lv[i] >> 4];
 		output_len--;
 	}
@@ -109,7 +119,7 @@
 		*output++ = '\0';
 
 	/* Indicate whether the output was truncated */
-	if (i < in_len)
+	if (truncated)
 		return -ENOSPC;
 
 	return 0;
diff --git a/tests/gsm0408/gsm0408_test.c b/tests/gsm0408/gsm0408_test.c
index b5f8061..db1d45a 100644
--- a/tests/gsm0408/gsm0408_test.c
+++ b/tests/gsm0408/gsm0408_test.c
@@ -727,6 +727,17 @@
 		.dec_ascii = "(none)",
 		.dec_rc = -EIO,
 	},
+	{
+		.test_name = "decoding buffer is one byte too small (OS#4049)",
+
+		/* Decoding test */
+		.dec_hex   = "022143", /* "1234" */
+		.dec_ascii = "123",    /* '4' was truncated */
+		.dec_rc    = -ENOSPC,
+
+		/* Buffer length limitations */
+		.dec_buf_lim = 4,
+	},
 };
 
 static void test_bcd_number_encode_decode()
diff --git a/tests/gsm0408/gsm0408_test.ok b/tests/gsm0408/gsm0408_test.ok
index 844c201..d343869 100644
--- a/tests/gsm0408/gsm0408_test.ok
+++ b/tests/gsm0408/gsm0408_test.ok
@@ -186,6 +186,10 @@
   - Decoding HEX (buffer limit=0) ''...
     - Expected: (rc=-5) '(none)'
     -   Actual: (rc=-5) '(none)'
+- Running test: decoding buffer is one byte too small (OS#4049)
+  - Decoding HEX (buffer limit=4) '022143'...
+    - Expected: (rc=-28) '123'
+    -   Actual: (rc=-28) '123'
 
 Constructed RA:
 077-121-666-5