diff --git a/internal/bbsim/devices/service_test.go b/internal/bbsim/devices/service_test.go
new file mode 100644
index 0000000..f83193a
--- /dev/null
+++ b/internal/bbsim/devices/service_test.go
@@ -0,0 +1,89 @@
+/*
+ * Copyright 2018-present Open Networking Foundation
+
+ * Licensed under the Apache License, Version 2.0 (the "License");
+ * you may not use this file except in compliance with the License.
+ * You may obtain a copy of the License at
+
+ * http://www.apache.org/licenses/LICENSE-2.0
+
+ * Unless required by applicable law or agreed to in writing, software
+ * distributed under the License is distributed on an "AS IS" BASIS,
+ * WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied.
+ * See the License for the specific language governing permissions and
+ * limitations under the License.
+ */
+
+package devices
+
+import (
+	"github.com/opencord/bbsim/internal/bbsim/types"
+	"github.com/opencord/voltha-protos/v2/go/openolt"
+	"gotest.tools/assert"
+	"net"
+	"testing"
+)
+
+type mockService struct {
+	Name                   string
+	HandleAuthCallCount    int
+	HandleDhcpCallCount    int
+	HandlePacketsCallCount int
+}
+
+func (s *mockService) HandleAuth(stream types.Stream) {
+	s.HandleAuthCallCount = s.HandleAuthCallCount + 1
+}
+
+func (s *mockService) HandleDhcp(stream types.Stream, cTag int) {
+	s.HandleDhcpCallCount = s.HandleDhcpCallCount + 1
+}
+
+func (s *mockService) HandlePackets(stream types.Stream) {
+	s.HandlePacketsCallCount = s.HandlePacketsCallCount + 1
+}
+
+func TestService_HandleAuth_noEapol(t *testing.T) {
+	mac := net.HardwareAddr{0x2e, 0x60, byte(1), byte(1), byte(1), byte(1)}
+	onu := createMockOnu(1, 1)
+	s, err := NewService("testService", mac, onu, 900, 900,
+		false, false, false, 64, 0, false,
+		0, 0, 0, 0)
+
+	assert.NilError(t, err)
+
+	stream := &mockStream{
+		Calls:   make(map[int]*openolt.Indication),
+		channel: make(chan int, 10),
+	}
+
+	s.HandleAuth(stream)
+
+	// if the service does not need EAPOL we don't expect any packet to be generated
+	assert.Equal(t, stream.CallCount, 0)
+
+	// state should not change
+	assert.Equal(t, s.EapolState.Current(), "created")
+}
+
+func TestService_HandleAuth_withEapol(t *testing.T) {
+	mac := net.HardwareAddr{0x2e, 0x60, byte(1), byte(1), byte(1), byte(1)}
+	onu := createMockOnu(1, 1)
+	s, err := NewService("testService", mac, onu, 900, 900,
+		true, false, false, 64, 0, false,
+		0, 0, 0, 0)
+
+	assert.NilError(t, err)
+
+	stream := &mockStream{
+		Calls: make(map[int]*openolt.Indication),
+	}
+
+	s.HandleAuth(stream)
+
+	// if the service does not need EAPOL we don't expect any packet to be generated
+	assert.Equal(t, stream.CallCount, 1)
+
+	// state should not change
+	assert.Equal(t, s.EapolState.Current(), "eap_start_sent")
+}