Advantages of MPLS VPN Network over Point to Point Leased Lines for WAN Connectivity

In this article, we discuss about two important forms of Wide Area Network Connectivity – MPLS VPN Network and Point to Point Leased Lines.  We also see how or why MPLS  VPN networks have started to gain more popularity for private wide area network connectivity for medium and large organizations having multiple branches.

When you have multiple branches across a state or a country, you would definitely be wanting to connect all these branches together to facilitate data transfer/ access between them in order to accelerate the speed of business transactions. There are various options  to be considered for creating such Wide Area Networks (WAN) like,

Point to Point Leased Lines
MPLS VPN Network Connectivity
Internet Leased Lines with Site-to-Site VPN (Virtual Private Network)
/ VPN over Broadband
Dial-up/ CDMA/ 3G Connectivity /4G Connectivity for small branches
Satellite (VSAT) Connectivity for remote locations

Of these, let us focus on the first two modes of connectivity in this article – Point to Point Leased Lines and MPLS VPN Network connections.

Point to Point Leased Lines - Architecture

Point to Point Leased Lines for WAN Connectivity – Architecture

MPLS Network Architecture

Multi-Label-Protocol-Switching (MPLS) Network Architecture

As shown in the first diagram, a point to point Leased Line is formed by connecting every site to every other site using leased lines provided by the service provider network (Or in very large organizations, their own network). This is a private network and is used primarily for site-to-site communications. So for an organization having branches in five locations, four links need to connect each location to all other locations to complete the leased line network. For ‘n’ locations, the number of links required in each location would be ‘n-1’.

An MPLS Network is formed by connecting each location with a single link (as shown in the second diagram) to a service provider MPLS network. An MPLS network stands for Multi-Protocol Label Switching and any packet coming to the Label edge routers (from individual locations – source, to the service provider MPLS network) are encapsulated with an MPLS label which is used to identify it and route it through the MPLS network. This label is discarded when the packet comes out of the MPLS network back to individual locations – destination.

In both the above cases, a wide variety of physical hardware is used to carry the information including fiber, copper circuits, wireless connectivity, satellite connectivity etc. The MPLS core service provider network also use high-capacity MPLS routers in addition to the MPLS edge routers which send and receive data from the routers located in the individual locations.

Let us now look at the Factors which have enabled MPLS VPN Networks to become more favorable for organizations that want to inter-connect their various branches when compared to Point to Point Leased Lines.

Traffic Engineering: Since the MPLS packets are being added at the MPLS Edge routers, it is possible to set the path that the traffic will have to take through the network. More specifically, each class of traffic (like data, voice, video etc) can be set individual performance characteristics.

Quality of Service: Since MPLS network enables traffic engineering, it is possible to send (for example) – data traffic over a lower priority path and real-time delay sensitive voice/ video packets over a high priority/ lesser used/ shorter path. This enables network convergence (The Wide Area Network becomes more suitable for introduction of new services like voice, video, multi-cast traffic, hosting etc).

Network Redundancy: An MPLS core network is generally designed and built to overcome individual hardware (router) faults or line disconnection. In such cases, the data is re-routed through the next optimum path with a fail-over time of 50 ms or lesser. Even the last mile connections can be backed up using CDMA wireless back up etc, depending upon the options with the service provider.

Easy and Cost effective Expansion: For organizations that are having a lot of branches or expanding with new branches, MPLS network would be very cost-effective as each branch needs one MPLS link while each branch would need n-1 links for point to point Leased Lines (n being the total number of branches). MPLS makes it easy for instantaneous addition and deletion of sites.

Protocol Independent forwarding: MPLS networks can carry any type of packets – be it IP, frame relay or ATM using the same infrastructure. This is because, what ever type of packets comes in, MPLS labels would be attached to it for transmitting them over the MPLS network and these labels are protocol independent.

Connection oriented network: MPLS is a connection-oriented network unlike connection less networks like IP. So, it is more reliable.

Service Level Agreement (SLA): Service Providers generally provide an SLA – Service Level Agreement for MPLS networks with a guarantee of very minimum downtime during the contract period (usually one year or its multiples). This is possible because an MPLS network can be pro-actively monitored and maintained. It is possible to analyze the circuit performance continuously and provide immediate fault rectification and support.

Bandwidth Allocation: MPLS networks allow for dynamic bandwidth allocation and hence can be used to provide bandwidth on demand (for a specific period etc) to customers. Further, rate limiting and other bandwidth management parameters allow a certain bandwidth to be dedicated for mission critical applications.

Security: Service providers take full responsibility for the security of information that is sent over an MPLS network. Service providers also create IP tunnels throughout the network without the need for any encryption from user-end.

International MPLS: There are options with service providers to connect individual locations across different countries using MPLS by sharing and inter-connecting their respective MPLS networks.

Lesser Hops: With an MPLS network, there are lesser number of hops between the various network points resulting in improved response times and application performance.

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  1. good and informative

  2. hi,

    it is the best information available on internet.


  3. Hi

    Really it is a excellent & precise Explanation.

    I need more detail about MPLC.

    Thank you.

    Danial Raj

  4. Hi
    Its been a great stuff to know exact about mpls and vpn.
    great work..

    Thank you

  5. This is really informative. I am interested in knowing how MPLS technology will add to the advantages of computerization in Government Organizations.

    • MPLS is a point to point private network connectivity technology. So, if a Government department has multiple branches, they could share the applications (like ERP, etc) available in one location (like HO) to be accessed safely and securely by any of the branches. But all of them should be connected with MPLS lines, from the same service provider.

      • We have SAP (ERP) at one location, which needs to be accessed from multple locations ( 8 Nos), but numbers of remote locations are approx 50 Nos, is this is a stable and cost effective solution in India.


        • I don’t think that’s going to be cost effective. The biggest expense would be the additional licenses for the ERP system (or whatever it takes to access it remotely).

          The expense of the network infrastructure would also be considerable, if you are planning to take a MPLS point at each location. If you restrict the capacity of each MPLS point (like 256 kbps, etc), perhaps it could be cheaper… But check if the ERP system can work in such bandwidths.

          The most cost effective solution would be to take broadband connections at all locations and go with a VPN (Virtual Private Network) solution at the remote locations from the Central location. In that case, the central location needs a good Router/ UTM with VPN Licenses and the remote location would need a software based VPN client installed on their computers.

  6. Hi,

    this info was great! I’m doing an assignment at university and really need some clear info on MPLS as i was just getting confused amongst the huge google search! thanks 🙂

  7. In fact, do you have an article on Leased Lines or satellites? Basically i need to figure out advantages and disadvantages between the lot then “advise a company” (that’s my assignment lol)

  8. goos stuff…very informative..thanks

  9. It is very good article to learn MPLS technology


  10. Good Stuff. Must be appreciated

  11. very very nice

  12. thanks,this was so informative

  13. very nice article to learn mpls…………

  14. beautiful,pointwise, illustrative and clear… great job! I got wat i was luking for, thanx so much guys!

  15. not sure I agree with you on these points. I can not speak for MPLS, but our 13 site point-to-point (PTP) network does not need n-1 links for every site. We use a core router at one site, and there is a fiber mux and slyk provided by the service provider at the core site. Each PTP t1 goes from the remote back to the core site. When we add a site, we simply add another T1 circuit to the core site. I guess this is hub and spoke, but not a redundant mesh, like your model suggests. I am looking into MPLS, but moreso as an alternative to the outages we experience with our provider’s copper t1’s. If MPLS works over the same infrastructure, I’m not sure I see the benefits.

    • You can have such an architecture, but no two sites are directly connected to each other and the communications must always go through the core router at the central location. So, even though you take one connection at individual locations, you need n+1 connections at the central location where n is the number of sites.

      With MPLS, all the individual branches and the central sites just have one connection. So, totally you have n connections instead of 2n connections required for your current scenario. Also, you might want to provision a slightly higher bandwidth for the central location if all your servers are located there. But that doesn’t have to be ‘n’ times the bandwidth of each site.

      Also point to point leased line charges are calculated between two location for a certain distance. For example, different charges apply for A and B locations that are 5 km away from each other and 25 km away from each other. If you are not being charged that way, you have some other form of data connectivity similar to leased lines, but a proprietary architecture.

  16. Hi all,
    Thanks for the explanation, very interesting.

    As I understood, VPN by MPLS network is replacing leased line.

    My question is, if I need to do big files transfer, what is the best to use?

    we just order VPN point to point connection by MPLS network. We should have 10Mbps line.
    But we can only reach 1.5Mbps by SESSION.
    I can open several sessions and reach 10Mbps but only 1.5Mbps by session. In my example, that’s mean the big file transfer we have to do is done at 1.5Mbps…

    I wonder if a “real” leased line will have same issue?
    And how can I do to use the full bandwidth on that MPLS line if I just need to do transfer between 2 servers (1 transfer = 1 session).

    Or is there a “special config” to force router creating multiple session for the same download?

    Many thanks in advance for additional info.

    • Generally, there should not be a difference between the bandwidth offered by a Leased Line and an MPLS connection. I am not very sure about what is causing that 1.5 Mbps per session limitation, but I guess that doesn’t have to do with MPLS vs Leased Lines.

    • Hi,

      In every kind of network there is one constant that you can’t overcome: the speed of light. So even if you order 10G mpls you’ll have the same throughput per session.

      That is because how TCP works. You should tweak the window size to accommodate long distances.
      A quick google search results in the following formula: TCP-Window-Size-in-bits / Latency-in-seconds = Bits-per-second-throughput

  17. This was the first time i was reading about MPLS , and i being a novice it helped me a lot .

    Thanks a lot.

  18. After doing a search for MPLS and Leased lines for over half an our, I came across this and its very clear and concise. Exactly what I was looking for. Many thanks

  19. Hi,

    Thanks dear. It is very useful info for me.

    Please help me about OSPF & EIGRP.


  20. Very useful info..

  21. Hi, I’m in the credit card terminal business, currently looking for solution for mutiple terminals with IP( using Ethernet Connection) to connect to a HOST(BANK) which doesn’t support IP, thus requiring a gateway/medium which could act as a device to connect via leased line to the HOST.

  22. Nice,

    Does MPLS will work across the service providers ? I have 3 office’s and 2 office’s are under different provider ?

    If yes which MPLS connection,i will take from SP ?

  23. excellent explanation

  24. What is the technical inside architecture of MPLS cloud. and how it reduce the Nos of Hopes. Please guide me.

  25. v.good and easy 2 understand

  26. Thanks for clear info on MPLS

  27. very well describe

  28. I found this site very helpful and informative. I will be waiting for the new articles released through this website.

  29. Hi,

    This is indeed a very interesting article about MPLS. This is actually what I was looking for.

    Thanks a lot for sharing the knowledge.

  30. Its good one . And it should be spearate everywhere who are working on LL and MPLS .

  31. Its has given very good explanation on advantage of MPLS over leased line

  32. SAP Business one will work through MPLS VPN Connectivity.

  33. we have a point to point connection to from HQ to all our branch offices. now what I am dealing with is that the printing from west coast offices to print server are very slow!and I am looking for a solutions with current infrastructure

  34. Very neat explanation…Thanks

  35. Any difference in the physical medium which is used for MPLS and leased line circuits?

  36. Well explained
    thank u

  37. Leased line is a great opportunity for all large or small business. It is better than fibre or broadband. Leased line is very needed for any small of large organization. So i think your post must be very helpful for any person.Finally leased line is very effective for exchanging Document.

  38. Sokaribo Christian

    Great article. Thanks.

  39. No disadvantages mentioned in this article. Kinldy help me find some disadvanges of the same.


  40. Hello,

    Thanks for your helpful information. my organization looking to make an Videoconferecing between headquarter and remote sites. Currently, it has lease line connection, so I am wondering how many bandwidth do think will need?

  41. great stuff…for telecom

  42. Very informative

  43. Great information How do you identify opportunities or business that can utilize this platform

  44. good one

  45. ★Thanks all for all information

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