diff --git a/app/notifications/process_client_response.py b/app/notifications/process_client_response.py
index 3de60c587..e1cf20edc 100644
--- a/app/notifications/process_client_response.py
+++ b/app/notifications/process_client_response.py
@@ -2,6 +2,7 @@ import uuid
 
 from datetime import datetime
 from flask import current_app
+from notifications_utils.template import SMSMessageTemplate
 
 from app import statsd_client
 from app.clients import ClientException
@@ -15,6 +16,7 @@ from app.celery.service_callback_tasks import (
 from app.config import QueueNames
 from app.dao.notifications_dao import dao_update_notification
 from app.dao.service_callback_api_dao import get_service_delivery_status_callback_api_for_service
+from app.dao.templates_dao import dao_get_template_by_id
 from app.models import NOTIFICATION_PENDING
 
 sms_response_mapper = {
@@ -92,6 +94,19 @@ def _process_for_status(notification_status, client_name, provider_reference):
             notification.sent_at
         )
 
+    if notification.billable_units == 0:
+        service = notification.service
+        template_model = dao_get_template_by_id(notification.template_id, notification.template_version)
+
+        template = SMSMessageTemplate(
+            template_model.__dict__,
+            values=notification.personalisation,
+            prefix=service.name,
+            show_prefix=service.prefix_sms,
+        )
+        notification.billable_units = template.fragment_count
+        notifications_dao.dao_update_notification(notification)
+
     if notification_status != NOTIFICATION_PENDING:
         service_callback_api = get_service_delivery_status_callback_api_for_service(service_id=notification.service_id)
         # queue callback task only if the service_callback_api exists
diff --git a/tests/app/notifications/test_process_client_response.py b/tests/app/notifications/test_process_client_response.py
index 474aa732b..d4f16750a 100644
--- a/tests/app/notifications/test_process_client_response.py
+++ b/tests/app/notifications/test_process_client_response.py
@@ -96,7 +96,7 @@ def test_process_sms_response_does_not_send_status_update_for_pending(sample_not
     send_mock.assert_not_called()
 
 
-def test_process_sms_updates_sent_by_with_client_name_if_not_in_noti(notify_db, sample_notification):
+def test_process_sms_updates_sent_by_with_client_name_if_not_in_noti(sample_notification):
     sample_notification.sent_by = None
     success, error = process_sms_client_response(
         status='3', provider_reference=str(sample_notification.id), client_name='MMG')
@@ -105,7 +105,16 @@ def test_process_sms_updates_sent_by_with_client_name_if_not_in_noti(notify_db,
     assert sample_notification.sent_by == 'mmg'
 
 
-def test_process_sms_does_not_update_sent_by_if_already_set(mocker, notify_db, sample_notification):
+def test_process_sms_updates_billable_units_if_zero(sample_notification):
+    sample_notification.billable_units = 0
+    success, error = process_sms_client_response(
+        status='3', provider_reference=str(sample_notification.id), client_name='MMG')
+    assert error is None
+    assert success == 'MMG callback succeeded. reference {} updated'.format(sample_notification.id)
+    assert sample_notification.billable_units == 1
+
+
+def test_process_sms_does_not_update_sent_by_if_already_set(mocker, sample_notification):
     mock_update = mocker.patch('app.notifications.process_client_response.set_notification_sent_by')
     sample_notification.sent_by = 'MMG'
     process_sms_client_response(