MPLS Pricing


The following is extracted from the Research Report entitled The Falling Costs of Wide Area Networks

For this report, we asked vendors to price three scenarios with the option of either supplying Internet access through their MPLS cloud, or connecting it to the main IT office of an organisation. Each vendor was given the same site locations to quote for.

The three scenarios were as follows:

1. 5 Sites:
London HQ with 10Mb Ethernet into MPLS and 4Mb Internet access;
4 other sites in cities spread from south to north with 2Mb leased lines;
All sites connected through MPLS.
 

2. 20 Sites:
London HQ with 10Mb Ethernet into MPLS and 10Mb Internet access;
6 sites with 2Mb leased lines;
13 sites with 8Mb ADSL;
All sites connected through MPLS.

3. 50 Sites:
London HQ with 100Mb Ethernet into MPLS and 34Mb Internet access;
12 sites with 2Mb leased lines;
37 sites with 8Mb ADSL;
All sites connected through MPLS

Results from 2008 pricing survey, based on scenarios above:

Note that the monthly fees include the cost of the actual lines as well as MPLS and that installation is for the entire system including the lines. (Prices exclude VAT)

What is most dramatic about these prices is the extent to which prices have dropped.  First and foremost, MPLS has eliminated the need for private lines, thus drastically cutting the cost of creating a corporate network.  But even more interesting, is the extent by which the cost of a 2Mb leased line has fallen.  For example, according to the OECD Communications Outlook (2007), as recently as 2006 2Mb lines cost £2,000 per month; while now in 2008 lines can be leased for as little as £300 per month.  The progress of Ethernet-based leased lines promises to bring these prices dramatically lower, maybe eventually eliminating 2Mb lines altogether in favour of 10Mb and even 100Mb lines.
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