What is Multiprotocol Label Switching (MPLS)?

Mikaela Bray
Mikaela Bray | Contributing Writer
Last updated: April 20, 2021
What is Multiprotocol Label Switching (MPLS)
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Multiprotocol Label Switching or MPLS is a telecommunication related technology that speeds and shapes data flow across enterprise networks. This technique is protocol-agnostic, meaning it is not partial to any particular protocol.

MPLS was invented in the 1990s as an alternative to the internet protocol (IP) routing procedure. In the latter method, each router finds the next destination of the data packet by inspecting its IP address before checking its routing table. This IP routing procedure consumed a lot of time as well as hardware resources. A router is a device that directs and regulates traffic between various networks. A routing table is a set of rules represented in the form of a table that determines where the data packets will go to.

In an MPLS network, data packets carry labels. These labels contain information regarding the individual packets. When the first router receives the data packet, the latter’s destination is quickly identified with the help of the labels. Over the years, MPLS still remains a preferred technology because of its flexibility, security and traffic engineering.

MPLS VPN and data packets

Data packets are blocks in which data travels. You can also say that packets are the basic units of communication over a digital network.

Once all these data packets reach their destination, they reassemble according to their original size. Every packet is structured according to its protocol and its type.

An MPLS VPN is a virtual private network that sits atop the MPLS of the service provider. Typically, this VPN is available in layer 2 or layer 3 options and is unencrypted.

Circuit in MPLS

There are three sections in an MPLS circuit.

They are:

  • Local Loop
  • Intermediate
  • MPLS backbone.

Most problems associated with the MPLS occur in the Local Loop part of the circuit. This is actually a piece of copper wire that connects the office building to the carrier’s POP or Point of Presence.

The backbone is the core router(s) that provides high-speed connectivity between the MSE routers. These routers provide services like ATM, FR, Ethernet, and IP/MPLS VPNs. They also contain various line cards and physical interfaces as well.

Cisco MPLS

The Cisco MPLS solution provides differentiated, highly scalable and end-to-end internet protocol services to enterprises as well as customers. This solution can be easily configured and managed. The Cisco MPLS solution helps companies and service providers to create modern intelligent networks that offer a wide variety of services over a single platform. Organisations can achieve their SLAs or service level agreements by integrating MPLS application components such as Layer 3 and Layer 2 VPNs, QoS, GMPLS etc. The GMPLS technology enhances the MPLS service.

According to the MPLS definition, MPLS is a technique of transmitting data across high-performance telecommunication networks. This technique can work with several rules and procedures with the same level of efficiency. In MPLS, data is transmitted as packets and each packet has a specific payload (data quantity) and a header. When all the packets reach their destination, they reassemble themselves according to their original configuration. MPLS has an advantage over the other technologies because data transmission happens safely, securely and very quickly.

MPLS protocol

The term MPLS protocol means that data packet transmission happens irrespective of the protocols. The word ‘Multiprotocol’ means that this technology works with the IP (internet protocol), ATM or the Asynchronous Transport Mode and the frame relay protocols. The ATM technique compresses data into small, fixed-size cells which makes it possible to send them across networks quickly. Frame relay protocols help in the transfer of data packets between routers. This protocol is an improvement over the earlier X.25 switching and helps in saving equipment cost and reducing network delays.

Main differences between MPLS and VPN

MPLS is not the same thing as VPN. Both differ in terms of application, cost etc:

  • Cloud – VPNs work on a wide range of cloud services. In the case of MPLS, choice is limited.
  • Traffic control – in VPN, the customer has more control over traffic while in the MPLS, it is the service provider who has more say.
  • Setup and management – in the case of VPNs, it is the customer who has to set up. In the case of MPLS, it is the service provider who is responsible.

There is another key difference to note in the MPLS vs VPN comparison — service and security.

Internet protocol VPNs cannot prioritize traffic and its management. However, MPLS can easily do this task. Since VPNs work over open networks, this means additional security features need to be deployed. MPLS works on shared networks but is secure. Though there is no encryption in MPLS, customers can build a layer of security so that their data cannot be read by hackers.

Pricewise, MPLS is a significantly more expensive service than VPNs.

MPLS on routers

The MPLS router performs the core function of an MPLS network. This router is also called a Label Switching Router. The main task of this router is to make sure that the data remains on the same path while traveling toward its destination. An MPLS router quickly reads the label on the data packet and determines its route. The router doesn’t have to read the routing tables while arriving at a decision. That is why the MPLS technology sends the data quickly from one network to another.

MPLS utility

Is there any MPLS utility during its deployment? There are at least four advantages here:

  • Reduces cost – since it is a Level 2.5 technology, it allows private routing of data but at a reduced cost. This technology achieves its objective by sharing resources across the network. Due to its agnostic nature, MPLS can be deployed on a large scale.
  • QoS Attributes – this property helps customers assign priority to traffic. QoS stands for Quality of Service and means the quality of data being transmitted.
  • Helps in scaling up – the multi-protocol label switching technology helps in the scaling up of large or more complex networks. The good part of this protocol is that it combines the advantages of physical circuits with those of pure IP-routing protocols. In a sense, the MPLS protocol has a hybrid nature.
  • Traffic Routing – with MPLS, data packets are sent to the destinations mentioned on the labels put on the packets. This means that there is more predictability and reliability of traffic movement.

MPLS Layer 3 VPN

How does MPLS layer 3 VPN work? In a layer 3 environment, the customer and the service provider work together in determining the routing. The customer can run any routing protocol like OSPF, EIGRP or BGP with the help of the service provider.

Later, these routes can be shared with other sites in the network. In this VPN, the routers of the provider route and forward traffic on the transit network. To do so, the service provider must know the IP addresses of all the devices that are generating traffic.

The MPLS layer 3 VPN needs more processing power than the Layer 2 VPN. This is so because the former has bigger routing tables. CE or the customer edge router sits on the edge of the customer site. This route advertises or tells the route of a data packet to the PE. The PE or the provider edge router is owned by the service provider. There can be one or several PE routers that can run on the service provider’s site.

When should companies build MPLS?

As the IT functions of companies evolve from being cost centers to being service providers, companies must start thinking in terms of building their MPLS solutions. The following kinds of users must consider thinking of building MPLS solutions:

  • High-security departments — in some organizations, it is imperative to isolate a group of users from others as the traffic of the former exceeds beyond a certain point. For this purpose, it is preferable to use VLANs.
  • Government — many ministries (like the Ministry of Defense) need to have their own MPLS for reasons of security.

Cost of MPLS

MPLS connectivity is much more expensive than the traditional internet connection. Typically, MPLS is priced at $300-$600 per Mbps where there is copper connectivity. In comparison, the bandwidth cost ranges between $1.5- $15 per Mbps per month.

Note that the MPLS pricing is with regard to enterprise networks and not retail consumers. Fiber-based MPLS costs $60-$200 per month for individuals. This pricing is on a per Mbps basis. In contrast, fiber-based inter-connectivity for individuals is roughly half the MPLS figures.

Even though MPLS has been around for nearly 15 years now, still the prices have not come down. There are several reasons for that. The most important reason is that corporations have monopolized last mile TDM links i.e. the copper connections to business offices.

Another reason is the price-in-elasticity. Service providers realize that reducing the price of hardware does not mean higher sales.

The third reason has got to do with the reliability of the MPLS services. These are much much more reliable than traditional internet services.

Top MPLS companies

There are several companies around the world that offer MPLS services. In order to choose the best MPLS company, you must ask these questions: do these services keep the end-user in mind? Do these services offer hybrid networks? Meaning, are they able to maintain their standards at corporate headquarters, branches and remote sites? Are they customer friendly? Can they set up new sites quickly? Do they have the right credentials in the market? Do their customers like them?

There are several global MPLS providers. Some of them are:

  • Talk Talk Business
  • Verizon
  • Vodafone
  • British Telecom or BT
  • Colt
  • Century Telecom
  • Interroute
  • AT&T
  • Spitfire
  • Orange Business Services
  • SAS Global Sevices
  • Virgin Media Services
  • Cisco.

While choosing your service provider, the most important question to ask is: can it integrate your existing infrastructure with the MPLS solution? A pertinent question to ask is how long will the downtime be? Would the service provider give a single view of the whole infrastructure to the client?

Bottom line

To sum up, an MPLS solution shapes and speeds up traffic flows across networks. Data is carried in packets or blocks, and each of these blocks is routed on the basis of the information contained in the header.

Since the router is able to read this information quickly, data transmission happens quicker in comparison to the older IP routing.

Typically, MPLS costs much more than a traditional internet connection and the most important reason is that data transmission in MPLS is more reliable.

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  1. vivenne.craig

    You always make any topic very simple! Thanks a ton. I have read so many of your posts and I have learnt a lot.

  2. BennieBennett

    Although MPLS offers a great security feature to users, I feel the price is too much when compared to the traditional internet connection. Paying $300-$600 per Mbps where there is copper connectivity is really much for me.

    1. Stu106

      Yeah I was gonna say, I cannot abide the price. I don’t care how good it is, I don’t have that kind of money lying around. For that amount of money, I’ll just live with worse security, lol.

  3. morningglory86

    A potential drawback with MPLS is security. An MPLS network does not offer any inherent data protection, and improper implementation can open up your network to vulnerabilities

  4. Sabrina Walsh

    Working with a security firm has opened my eyes to the importance of this technology. Indeed MPLS solutions shapes and speeds up traffic flows across networks, and data transmission happens quicker in comparison to the older IP routing.

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