diff --git a/openbsc/include/openbsc/chan_alloc.h b/openbsc/include/openbsc/chan_alloc.h
index 3afcb3c..63f875b 100644
--- a/openbsc/include/openbsc/chan_alloc.h
+++ b/openbsc/include/openbsc/chan_alloc.h
@@ -40,7 +40,7 @@
 struct gsm_subscriber_connection *connection_for_subscr(struct gsm_subscriber *subscr);
 
 /* Allocate a logical channel (SDCCH, TCH, ...) */
-struct gsm_lchan *lchan_alloc(struct gsm_bts *bts, enum gsm_chan_t type);
+struct gsm_lchan *lchan_alloc(struct gsm_bts *bts, enum gsm_chan_t type, int allow_bigger);
 
 /* Free a logical channel (SDCCH, TCH, ...) */
 void lchan_free(struct gsm_lchan *lchan);
diff --git a/openbsc/src/abis_rsl.c b/openbsc/src/abis_rsl.c
index 7068422..d83af4a 100644
--- a/openbsc/src/abis_rsl.c
+++ b/openbsc/src/abis_rsl.c
@@ -1167,6 +1167,7 @@
 	enum gsm_chreq_reason_t chreq_reason;
 	struct gsm_lchan *lchan;
 	u_int8_t rqd_ta;
+	int is_lu;
 
 	u_int16_t arfcn;
 	u_int8_t ts_number, subch;
@@ -1189,8 +1190,14 @@
 
 	counter_inc(bts->network->stats.chreq.total);
 
+	/*
+	 * We want LOCATION UPDATES to succeed and will assign a TCH
+	 * if we have no SDCCH available.
+	 */
+	is_lu = !!(chreq_reason == GSM_CHREQ_REASON_LOCATION_UPD);
+
 	/* check availability / allocate channel */
-	lchan = lchan_alloc(bts, lctype);
+	lchan = lchan_alloc(bts, lctype, is_lu);
 	if (!lchan) {
 		LOGP(DRSL, LOGL_NOTICE, "BTS %d CHAN RQD: no resources for %s 0x%x\n",
 		     msg->lchan->ts->trx->bts->nr, gsm_lchant_name(lctype), rqd_ref->ra);
diff --git a/openbsc/src/chan_alloc.c b/openbsc/src/chan_alloc.c
index 5325dc0..a0eda54 100644
--- a/openbsc/src/chan_alloc.c
+++ b/openbsc/src/chan_alloc.c
@@ -225,7 +225,8 @@
 }
 
 /* Allocate a logical channel */
-struct gsm_lchan *lchan_alloc(struct gsm_bts *bts, enum gsm_chan_t type)
+struct gsm_lchan *lchan_alloc(struct gsm_bts *bts, enum gsm_chan_t type,
+			      int allow_bigger)
 {
 	struct gsm_lchan *lchan = NULL;
 	enum gsm_phys_chan_config first, second;
@@ -243,6 +244,19 @@
 		lchan = _lc_find_bts(bts, first);
 		if (lchan == NULL)
 			lchan = _lc_find_bts(bts, second);
+
+		/* allow to assign bigger channels */
+		if (allow_bigger) {
+			if (lchan == NULL) {
+				lchan = _lc_find_bts(bts, GSM_PCHAN_TCH_H);
+				type = GSM_LCHAN_TCH_H;
+			}
+
+			if (lchan == NULL) {
+				lchan = _lc_find_bts(bts, GSM_PCHAN_TCH_F);
+				type = GSM_LCHAN_TCH_F;
+			}
+		}
 		break;
 	case GSM_LCHAN_TCH_F:
 		lchan = _lc_find_bts(bts, GSM_PCHAN_TCH_F);
diff --git a/openbsc/src/handover_logic.c b/openbsc/src/handover_logic.c
index 92580bf..30cea7b 100644
--- a/openbsc/src/handover_logic.c
+++ b/openbsc/src/handover_logic.c
@@ -104,7 +104,7 @@
 		return -ENOSPC;
 	}
 
-	new_lchan = lchan_alloc(bts, old_lchan->type);
+	new_lchan = lchan_alloc(bts, old_lchan->type, 0);
 	if (!new_lchan) {
 		LOGP(DHO, LOGL_NOTICE, "No free channel\n");
 		counter_inc(bts->network->stats.handover.no_channel);