Shows cost comparison of MPLS and p2p leased line networks, and busts the myth that MPLS networks are cheaper. On the contrary it is more expensive than p2p leased line networks.

1. Page 1 of 2
COMPARISON OF COSTS
MPLS VPN – VS – POINT-TO-POINT LEASED LINES
Let us consider connectivity between two points A and B at a chargeable distance
(1.25 x crow flight or radial distance) of more than 500km for a 64 kbps link
The Table below shows the comparison of costs between a point-to-point and MPLS
VPN connection.
TABLE 1
CROSS COUNTRY LINK
Sl Head of charge MPLS
VPN
Point-to-
point leased
line as per
Web site
Point-to-
point leased
line after
new
circular
Remarks
1 End link 5 km at A NA 11500 17811
2 End link 5 km at B NA 11500 17811
3 NTU rent at A NA NA 3500
4 NTU rent at B NA NA 3500
5 Long distance
charge between A
& B
NA 51000 51000
6 Port charge at A 63000 NA NA
7 Port charge at B 63000 NA NA
8 Total cost 126000 74000 93622
9 Service tax @12% 15120 8880 11234
10 Education Tax 2% 2520 1480 1872
11 Total cost based
on rack prices and
inclusive of taxes
and levies
143640 84360 106728 Based on
Rack prices
12 Percentage of
MPLS VPN cost
100% 58.73% 74.30% Point-to-
point leased
lines are
much
cheaper
13 Possible bulk
discounts
40% 25 to 30% 25 to 30%

2. Page 2 of 2
A similar comparison may be made of intra-city connectivity as shown in Table 2
below.
TABLE 2
INTRA-CITY LINK
Sl Head of charge MPLS
VPN
Point-to-
point leased
line as per
Web site 15
km
Point-to-
point leased
line as per
Web site 25
km
Remarks
1 Total circuit charge NA 25463 19116
3 NTU rent at A NA NA 3500
4 NTU rent at B NA NA 3500
6 Port charge at A 63000 NA NA
7 Port charge at B 63000 NA NA
8 Total cost 126000 25463 26116
9 Service tax @12% 15120 3056 3134
10 Education Tax 2% 2520 509 522
11 Total cost based
on rack prices and
inclusive of taxes
and levies
143640 29028 29772 Based on
Rack prices
12 Percentage of
MPLS VPN cost
100% 20.21% 20.73% Point-to-
point leased
lines are
much
cheaper
13 Possible bulk
discount
40$ 25 to 30% 25 to 30%