diff --git a/include/osmocom/gsm/mncc.h b/include/osmocom/gsm/mncc.h
index a094bb9..a51267e 100644
--- a/include/osmocom/gsm/mncc.h
+++ b/include/osmocom/gsm/mncc.h
@@ -1,6 +1,8 @@
 #ifndef _OSMOCORE_MNCC_H
 #define _OSMOCORE_MNCC_H
 
+#include <osmocom/gsm/protocol/gsm_04_08.h>
+
 #define GSM_MAX_FACILITY       128
 #define GSM_MAX_SSVERSION      128
 #define GSM_MAX_USERUSER       128
@@ -13,6 +15,18 @@
 	int		radio;		/* Radio Channel Requirement */
 	int		speech_ctm;	/* CTM text telephony indication */
 	int		speech_ver[8];	/* Speech version indication */
+	struct {
+		enum gsm48_bcap_ra		rate_adaption;
+		enum gsm48_bcap_sig_access	sig_access;
+		int				async;
+		int				nr_stop_bits;
+		int				nr_data_bits;
+		enum gsm48_bcap_user_rate	user_rate;
+		enum gsm48_bcap_parity		parity;
+		enum gsm48_bcap_interm_rate	interm_rate;
+		enum gsm48_bcap_transp		transp;
+		enum gsm48_bcap_modem_type	modem_type;
+	} data;
 };
 
 struct gsm_mncc_number {
diff --git a/include/osmocom/gsm/protocol/gsm_04_08.h b/include/osmocom/gsm/protocol/gsm_04_08.h
index 5057ada..7c558ce 100644
--- a/include/osmocom/gsm/protocol/gsm_04_08.h
+++ b/include/osmocom/gsm/protocol/gsm_04_08.h
@@ -1246,6 +1246,71 @@
 	GSM48_BCAP_RRQ_DUAL_FR	= 3,
 };
 
+/* GSM 04.08 Bearer Capability: Rate Adaption */
+enum gsm48_bcap_ra {
+	GSM48_BCAP_RA_NONE	= 0,
+	GSM48_BCAP_RA_V110_X30	= 1,
+	GSM48_BCAP_RA_X31	= 2,
+	GSM48_BCAP_RA_OTHER	= 3,
+};
+
+/* GSM 04.08 Bearer Capability: Signalling access protocol */
+enum gsm48_bcap_sig_access {
+	GSM48_BCAP_SA_I440_I450	= 1,
+	GSM48_BCAP_SA_X21	= 2,
+	GSM48_BCAP_SA_X28_DP_IN	= 3,
+	GSM48_BCAP_SA_X28_DP_UN	= 4,
+	GSM48_BCAP_SA_X28_NDP	= 5,
+	GSM48_BCAP_SA_X32	= 6,
+};
+
+/* GSM 04.08 Bearer Capability: User Rate */
+enum gsm48_bcap_user_rate {
+	GSM48_BCAP_UR_300	= 1,
+	GSM48_BCAP_UR_1200	= 2,
+	GSM48_BCAP_UR_2400	= 3,
+	GSM48_BCAP_UR_4800	= 4,
+	GSM48_BCAP_UR_9600	= 5,
+	GSM48_BCAP_UR_12000	= 6,
+	GSM48_BCAP_UR_1200_75	= 7,
+};
+
+/* GSM 04.08 Bearer Capability: Parity */
+enum gsm48_bcap_parity {
+	GSM48_BCAP_PAR_ODD	= 0,
+	GSM48_BCAP_PAR_EVEN	= 2,
+	GSM48_BCAP_PAR_NONE	= 3,
+	GSM48_BCAP_PAR_ZERO	= 4,
+	GSM48_BCAP_PAR_ONE	= 5,
+};
+
+/* GSM 04.08 Bearer Capability: Intermediate Rate */
+enum gsm48_bcap_interm_rate {
+	GSM48_BCAP_IR_8k	= 2,
+	GSM48_BCAP_IR_16k	= 3,
+};
+
+/* GSM 04.08 Bearer Capability: Transparency */
+enum gsm48_bcap_transp {
+	GSM48_BCAP_TR_TRANSP	= 0,
+	GSM48_BCAP_TR_RLP	= 1,
+	GSM48_BCAP_TR_TR_PREF	= 2,
+	GSM48_BCAP_TR_RLP_PREF	= 3,
+};
+
+/* GSM 04.08 Bearer Capability: Modem Type */
+enum gsm48_bcap_modem_type {
+	GSM48_BCAP_MT_NONE	= 0,
+	GSM48_BCAP_MT_V21	= 1,
+	GSM48_BCAP_MT_V22	= 2,
+	GSM48_BCAP_MT_V22bis	= 3,
+	GSM48_BCAP_MT_V23	= 4,
+	GSM48_BCAP_MT_V26ter	= 5,
+	GSM48_BCAP_MT_V32	= 6,
+	GSM48_BCAP_MT_UNDEF	= 7,
+	GSM48_BCAP_MT_AUTO_1	= 8,
+};
+
 #define GSM48_TMSI_LEN	5
 #define GSM48_MID_TMSI_LEN	(GSM48_TMSI_LEN + 2)
 #define GSM48_MI_SIZE 32
diff --git a/src/gsm/gsm48_ie.c b/src/gsm/gsm48_ie.c
index 0cb08c6..78619b9 100644
--- a/src/gsm/gsm48_ie.c
+++ b/src/gsm/gsm48_ie.c
@@ -128,7 +128,8 @@
 	bcap->coding = (lv[1] & 0x10) >> 4;
 	bcap->radio = (lv[1] & 0x60) >> 5;
 
-	if (bcap->transfer == GSM_MNCC_BCAP_SPEECH) {
+	switch (bcap->transfer) {
+	case GSM_MNCC_BCAP_SPEECH:
 		i = 1;
 		s = 0;
 		while(!(lv[i] & 0x80)) {
@@ -142,7 +143,68 @@
 			if (s == 7) /* maximum speech versions + end of list */
 				return 0;
 		}
-	} else {
+		break;
+	case GSM_MNCC_BCAP_UNR_DIG:
+	case GSM_MNCC_BCAP_FAX_G3:
+		i = 1;
+		while(!(lv[i] & 0x80)) {
+			i++; /* octet 3a etc */
+			if (in_len < i)
+				return 0;
+			/* ignore them */
+		}
+		/* octet 4: skip */
+		i++;
+		/* octet 5 */
+		i++;
+		if (in_len < i)
+			return 0;
+		bcap->data.rate_adaption = (lv[i] >> 3) & 3;
+		bcap->data.sig_access = lv[i] & 7;
+		while(!(lv[i] & 0x80)) {
+			i++; /* octet 5a etc */
+			if (in_len < i)
+				return 0;
+			/* ignore them */
+		}
+		/* octet 6 */
+		i++;
+		if (in_len < i)
+			return 0;
+		bcap->data.async = lv[i] & 1;
+		if (!(lv[i] & 0x80)) {
+			i++;
+			if (in_len < i)
+				return 0;
+			/* octet 6a */
+			bcap->data.nr_stop_bits = ((lv[i] >> 7) & 1) + 1;
+			if (lv[i] & 0x10)
+				bcap->data.nr_data_bits = 8;
+			else
+				bcap->data.nr_data_bits = 7;
+			bcap->data.user_rate = lv[i]  & 0xf;
+
+			if (!(lv[i] & 0x80)) {
+				i++;
+				if (in_len < i)
+					return 0;
+				/* octet 6b */
+				bcap->data.parity = lv[i] & 7;
+				bcap->data.interm_rate = (lv[i] >> 5) & 3;
+
+				/* octet 6c */
+				if (!(lv[i] & 0x80)) {
+					i++;
+					if (in_len < i)
+						return 0;
+					bcap->data.transp = (lv[i] >> 5) & 3;
+					bcap->data.modem_type = lv[i] & 0x1F;
+				}
+			}
+
+		}
+		break;
+	default:
 		i = 1;
 		while (!(lv[i] & 0x80)) {
 			i++; /* octet 3a etc */
@@ -151,6 +213,7 @@
 			/* ignore them */
 		}
 		/* FIXME: implement OCTET 4+ parsing */
+		break;
 	}
 
 	return 0;
@@ -168,7 +231,8 @@
 	lv[1] |= bcap->coding << 4;
 	lv[1] |= bcap->radio << 5;
 
-	if (bcap->transfer == GSM_MNCC_BCAP_SPEECH) {
+	switch (bcap->transfer) {
+	case GSM_MNCC_BCAP_SPEECH:
 		for (s = 0; bcap->speech_ver[s] >= 0; s++) {
 			i++; /* octet 3a etc */
 			lv[i] = bcap->speech_ver[s];
@@ -176,8 +240,29 @@
 				lv[i] |= bcap->speech_ctm << 5;
 		}
 		lv[i] |= 0x80; /* last IE of octet 3 etc */
-	} else {
-		/* FIXME: implement OCTET 4+ encoding */
+		break;
+	case GSM48_BCAP_ITCAP_UNR_DIG_INF:
+	case GSM48_BCAP_ITCAP_FAX_G3:
+		lv[i++] |= 0x80; /* last IE of octet 3 etc */
+		/* octet 4 */
+		lv[i++] = 0xb8;
+		/* octet 5 */
+		lv[i++] = 0x80 | ((bcap->data.rate_adaption & 3) << 3)
+			  | (bcap->data.sig_access & 7);
+		/* octet 6 */
+		lv[i++] = 0x20 | (bcap->data.async & 1);
+		/* octet 6a */
+		lv[i++] = (bcap->data.user_rate & 0xf) |
+			  (bcap->data.nr_data_bits == 8 ? 0x10 : 0x00) |
+			  (bcap->data.nr_stop_bits == 2 ? 0x40 : 0x00);
+		/* octet 6b */
+		lv[i++] = (bcap->data.parity & 7) |
+			  ((bcap->data.interm_rate & 3) << 5);
+		/* octet 6c */
+		lv[i] = 0x80 | (bcap->data.modem_type & 0x1f);
+		break;
+	default:
+		return -EINVAL;
 	}
 
 	lv[0] = i;
diff --git a/tests/Makefile.am b/tests/Makefile.am
index 308c691..d2c9e5c 100644
--- a/tests/Makefile.am
+++ b/tests/Makefile.am
@@ -3,7 +3,7 @@
 check_PROGRAMS = timer/timer_test sms/sms_test ussd/ussd_test		\
                  smscb/smscb_test bits/bitrev_test a5/a5_test		\
                  conv/conv_test auth/milenage_test lapd/lapd_test	\
-                 gsm0808/gsm0808_test
+                 gsm0808/gsm0808_test gsm0408/gsm0408_test
 if ENABLE_MSGFILE
 check_PROGRAMS += msgfile/msgfile_test
 endif
@@ -23,6 +23,9 @@
 gsm0808_gsm0808_test_SOURCES = gsm0808/gsm0808_test.c
 gsm0808_gsm0808_test_LDADD = $(top_builddir)/src/libosmocore.la $(top_builddir)/src/gsm/libosmogsm.la
 
+gsm0408_gsm0408_test_SOURCES = gsm0408/gsm0408_test.c
+gsm0408_gsm0408_test_LDADD = $(top_builddir)/src/libosmocore.la $(top_builddir)/src/gsm/libosmogsm.la
+
 lapd_lapd_test_SOURCES = lapd/lapd_test.c
 lapd_lapd_test_LDADD = $(top_builddir)/src/libosmocore.la $(top_builddir)/src/gsm/libosmogsm.la
 
diff --git a/tests/gsm0408/gsm0408_test.c b/tests/gsm0408/gsm0408_test.c
new file mode 100644
index 0000000..077063b
--- /dev/null
+++ b/tests/gsm0408/gsm0408_test.c
@@ -0,0 +1,133 @@
+/*
+ * (C) 2012 by Harald Welte <laforge@gnumonks.org>
+ * All Rights Reserved
+ *
+ * This program is free software; you can redistribute it and/or modify
+ * it under the terms of the GNU General Public License as published by
+ * the Free Software Foundation; either version 2 of the License, or
+ * (at your option) any later version.
+ *
+ * This program is distributed in the hope that it will be useful,
+ * but WITHOUT ANY WARRANTY; without even the implied warranty of
+ * MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+ * GNU General Public License for more details.
+ *
+ * You should have received a copy of the GNU General Public License along
+ * with this program; if not, write to the Free Software Foundation, Inc.,
+ * 51 Franklin Street, Fifth Floor, Boston, MA 02110-1301 USA.
+ *
+ */
+
+#include <string.h>
+#include <stdio.h>
+
+#include <osmocom/gsm/protocol/gsm_04_08.h>
+#include <osmocom/gsm/gsm48_ie.h>
+#include <osmocom/gsm/mncc.h>
+#include <osmocom/core/utils.h>
+#include <osmocom/core/msgb.h>
+
+
+static const uint8_t csd_9600_v110_lv[] = { 0x07, 0xa1, 0xb8, 0x89, 0x21, 0x15, 0x63, 0x80 };
+
+static const struct gsm_mncc_bearer_cap bcap_csd_9600_v110 = {
+	.transfer =	GSM48_BCAP_ITCAP_UNR_DIG_INF,
+	.mode =		GSM48_BCAP_TMOD_CIRCUIT,
+	.coding =	GSM48_BCAP_CODING_GSM_STD,
+	.radio =	GSM48_BCAP_RRQ_FR_ONLY,
+	.speech_ver[0]=	-1,
+	.data = {
+		.rate_adaption =	GSM48_BCAP_RA_V110_X30,
+		.sig_access =		GSM48_BCAP_SA_I440_I450,
+		.async =		1,
+		.nr_stop_bits =		1,
+		.nr_data_bits =		8,
+		.user_rate =		GSM48_BCAP_UR_9600,
+		.parity =		GSM48_BCAP_PAR_NONE,
+		.interm_rate =		GSM48_BCAP_IR_16k,
+		.transp =		GSM48_BCAP_TR_TRANSP,
+		.modem_type =		GSM48_BCAP_MT_NONE,
+	},
+};
+
+static const uint8_t speech_all_lv[] = { 0x06, 0x60, 0x04, 0x02, 0x00, 0x05, 0x81 };
+
+static const struct gsm_mncc_bearer_cap bcap_speech_all = {
+	.transfer =	GSM48_BCAP_ITCAP_SPEECH,
+	.mode =		GSM48_BCAP_TMOD_CIRCUIT,
+	.coding =	GSM48_BCAP_CODING_GSM_STD,
+	.radio =	GSM48_BCAP_RRQ_DUAL_FR,
+	.speech_ver = {
+		4, 2, 0, 5, 1, -1,
+	},
+};
+
+
+struct bcap_test {
+	const uint8_t *lv;
+	const struct gsm_mncc_bearer_cap *bc;
+	const char *name;
+};
+
+static const struct bcap_test bcap_tests[] = {
+	{ csd_9600_v110_lv, &bcap_csd_9600_v110, "CSD 9600/V.110/transparent" },
+	{ speech_all_lv, &bcap_speech_all, "Speech, all codecs" },
+};
+
+static int test_bearer_cap()
+{
+	struct gsm_mncc_bearer_cap bc;
+	int i, rc;
+
+	for (i = 0; i < ARRAY_SIZE(bcap_tests); i++) {
+		struct msgb *msg = msgb_alloc(100, "test");
+		int lv_len;
+
+		memset(&bc, 0, sizeof(bc));
+
+		/* test decoding */
+		rc = gsm48_decode_bearer_cap(&bc, bcap_tests[i].lv);
+		if (rc < 0) {
+			fprintf(stderr, "Error decoding %s\n",
+				bcap_tests[i].name);
+			return rc;
+		}
+		if (memcmp(&bc, bcap_tests[i].bc, sizeof(bc))) {
+			fprintf(stderr, "Incorrect decoded result of %s:\n",
+				bcap_tests[i].name);
+			fprintf(stderr, " should: %s\n",
+				osmo_hexdump((uint8_t *) bcap_tests[i].bc, sizeof(bc)));
+			fprintf(stderr, " is:     %s\n",
+				osmo_hexdump((uint8_t *) &bc, sizeof(bc)));
+			return -1;
+		}
+
+		/* also test re-encode? */
+		rc = gsm48_encode_bearer_cap(msg, 1, &bc);
+		if (rc < 0) {
+			fprintf(stderr, "Error encoding %s\n",
+				bcap_tests[i].name);
+			return rc;
+		}
+		lv_len = bcap_tests[i].lv[0]+1;
+		if (memcmp(msg->data, bcap_tests[i].lv, lv_len)) {
+			fprintf(stderr, "Incorrect encoded result of %s:\n",
+				bcap_tests[i].name);
+			fprintf(stderr, " should: %s\n",
+				osmo_hexdump(bcap_tests[i].lv, lv_len));
+			fprintf(stderr, " is:     %s\n",
+				osmo_hexdump(msg->data, msg->len));
+			return -1;
+		}
+
+		printf("Test `%s' passed\n", bcap_tests[i].name);
+		msgb_free(msg);
+	}
+
+	return 0;
+}
+
+int main(int argc, char **argv)
+{
+	test_bearer_cap();
+}
diff --git a/tests/gsm0408/gsm0408_test.ok b/tests/gsm0408/gsm0408_test.ok
new file mode 100644
index 0000000..5ce19e6
--- /dev/null
+++ b/tests/gsm0408/gsm0408_test.ok
@@ -0,0 +1,2 @@
+Test `CSD 9600/V.110/transparent' passed
+Test `Speech, all codecs' passed
diff --git a/tests/testsuite.at b/tests/testsuite.at
index 69624c1..2154269 100644
--- a/tests/testsuite.at
+++ b/tests/testsuite.at
@@ -71,3 +71,9 @@
 cat $abs_srcdir/gsm0808/gsm0808_test.ok > expout
 AT_CHECK([$abs_top_builddir/tests/gsm0808/gsm0808_test], [], [expout], [ignore])
 AT_CLEANUP
+
+AT_SETUP([gsm0408])
+AT_KEYWORDS([gsm0408])
+cat $abs_srcdir/gsm0408/gsm0408_test.ok > expout
+AT_CHECK([$abs_top_builddir/tests/gsm0408/gsm0408_test], [], [expout], [ignore])
+AT_CLEANUP