diff --git a/lib/include/srslte/test/ue_test_interfaces.h b/lib/include/srslte/test/ue_test_interfaces.h
index 177083290..ba5ed2b9a 100644
--- a/lib/include/srslte/test/ue_test_interfaces.h
+++ b/lib/include/srslte/test/ue_test_interfaces.h
@@ -67,7 +67,7 @@ public:
 
 class phy_dummy_interface : public phy_interface_rrc_lte
 {
-  bool set_config(srslte::phy_cfg_t config, uint32_t cc_idx = 0) override { return true; }
+  bool set_config(srslte::phy_cfg_t config, uint32_t cc_idx) override { return true; }
   bool set_scell(srslte_cell_t cell_info, uint32_t cc_idx, uint32_t earfcn) override { return true; }
   void set_config_tdd(srslte_tdd_config_t& tdd_config) override {}
   void set_config_mbsfn_sib2(srslte::mbsfn_sf_cfg_t* cfg_list, uint32_t nof_cfgs) override {}
diff --git a/srsue/hdr/stack/rrc/phy_controller.h b/srsue/hdr/stack/rrc/phy_controller.h
index 82c10640b..fd08544cc 100644
--- a/srsue/hdr/stack/rrc/phy_controller.h
+++ b/srsue/hdr/stack/rrc/phy_controller.h
@@ -117,7 +117,8 @@ public:
     row< wait_csel_res,   unknown_st,     cell_sel_res                                           >,
     // +----------------+---------------+--------------+------------------+----------------------+
     row< wait_in_sync,    in_sync_st,     in_sync_ev,    &c::set_success                         >,
-    row< wait_in_sync,    unknown_st,     timeout_ev                                             >
+    row< wait_in_sync,    unknown_st,     timeout_ev                                             >,
+    to_state<             unknown_st,     srslte::failure_ev                                     >
     // +----------------+---------------+--------------+------------------+----------------------+
     >;
     // clang-format on
@@ -129,7 +130,7 @@ public:
 private:
   phy_interface_rrc_lte*                             phy = nullptr;
   srslte::task_sched_handle                          task_sched;
-  srslte::event_observer<bool>                       cell_selection_once_observer;
+  srslte::event_observer<bool>                       cell_selection_notifier;
   std::function<void(uint32_t, uint32_t, bool)>      cell_selection_always_observer;
   srslte::event_dispatcher<cell_srch_res>            cell_search_observers;
   uint32_t                                           nof_pending_configs = 0;
diff --git a/srsue/src/stack/rrc/phy_controller.cc b/srsue/src/stack/rrc/phy_controller.cc
index 6dcf1d0f1..bd915c461 100644
--- a/srsue/src/stack/rrc/phy_controller.cc
+++ b/srsue/src/stack/rrc/phy_controller.cc
@@ -109,7 +109,7 @@ bool phy_controller::start_cell_select(const phy_cell_t& phy_cell, srslte::event
     log_h->warning("Failed to launch cell selection. Current state: %s\n", current_state_name().c_str());
     return false;
   }
-  cell_selection_once_observer = std::move(observer);
+  cell_selection_notifier = std::move(observer);
   return true;
 }
 
@@ -129,7 +129,9 @@ void phy_controller::selecting_cell::enter(phy_controller* f, const cell_sel_cmd
   csel_res.result = false;
 
   fsmInfo("Starting for pci=%d, earfcn=%d\n", target_cell.pci, target_cell.earfcn);
-  f->phy->cell_select(target_cell);
+  if (not f->phy->cell_select(target_cell)) {
+    trigger(srslte::failure_ev{});
+  }
 }
 
 void phy_controller::selecting_cell::exit(phy_controller* f)
@@ -147,7 +149,7 @@ void phy_controller::selecting_cell::exit(phy_controller* f)
   if (f->cell_selection_always_observer) {
     f->cell_selection_always_observer(target_cell.earfcn, target_cell.pci, result);
   }
-  f->task_sched.defer_task([f, result]() { f->cell_selection_once_observer(result); });
+  f->task_sched.defer_task([f, result]() { f->cell_selection_notifier(result); });
 }
 
 void phy_controller::selecting_cell::wait_in_sync::enter(selecting_cell* f)
diff --git a/srsue/test/upper/rrc_phy_ctrl_test.cc b/srsue/test/upper/rrc_phy_ctrl_test.cc
index 6369d9217..edd7ffa51 100644
--- a/srsue/test/upper/rrc_phy_ctrl_test.cc
+++ b/srsue/test/upper/rrc_phy_ctrl_test.cc
@@ -25,6 +25,8 @@
 
 namespace srsue {
 
+srslte::log_ref test_log{"TEST"};
+
 struct cell_search_result_test {
   cell_search_result_test(phy_controller* phy_ctrl_) : phy_ctrl(phy_ctrl_) {}
 
@@ -72,7 +74,6 @@ struct cell_select_result_test {
 
 int test_phy_ctrl_fsm()
 {
-  srslte::log_ref         test_log{"TEST"};
   srslte::task_scheduler  task_sched;
   phy_dummy_interface     phy;
   phy_controller          phy_ctrl{&phy, &task_sched};
@@ -167,10 +168,36 @@ int test_phy_ctrl_fsm()
   task_sched.run_pending_tasks();
   TESTASSERT(csel_tester.result == 0);
 
-  test_log->info("Finished RRC PHY controller test successfully\n");
+  phy_ctrl.start_cell_select(found_cell, csel_tester);
+
   return SRSLTE_SUCCESS;
 }
 
+class phy_test_dummy : public phy_dummy_interface
+{
+public:
+  bool success_on_cell_select_init = true;
+
+  bool cell_select(phy_cell_t cell) override { return success_on_cell_select_init; }
+};
+
+/// TEST: Check if controller handles the case when PHY fails to init cell selection
+int test_phy_cell_select_init_error_handling()
+{
+  srslte::task_scheduler task_sched;
+  phy_test_dummy         phy;
+  phy_controller         phy_ctrl{&phy, &task_sched};
+  phy_cell_t             found_cell{};
+  found_cell.pci                  = 1;
+  found_cell.earfcn               = 2;
+  int test_result                 = -1;
+  phy.success_on_cell_select_init = false;
+
+  phy_ctrl.start_cell_select(found_cell, [&test_result](bool csel_result) { test_result = csel_result ? 1 : 0; });
+
+  return test_result == 0;
+}
+
 } // namespace srsue
 
 int main()
@@ -178,4 +205,6 @@ int main()
   srslte::logmap::set_default_log_level(srslte::LOG_LEVEL_INFO);
 
   TESTASSERT(srsue::test_phy_ctrl_fsm() == SRSLTE_SUCCESS);
+  TESTASSERT(srsue::test_phy_cell_select_init_error_handling() == SRSLTE_SUCCESS);
+  srsue::test_log->info("Finished RRC PHY controller test successfully\n");
 }