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How much does an MPLS circuit cost?

The answer from BT Business and BT Wholesale is anything from approximately £100 per month for MPLS into Broadband and between £300 and well over £1000 per month for UK and International Ethernet.

By Robert Sturt July 5, 2017
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We are able to help you develop an initial budget, as well as plan to incorporate Cloud and Security where required. Learning about how our BT Partnership  has helped numerous businesses with their Global or UK MPLS WAN pricing is simple as meeting us for coffee throughout the UK or ask us to attend a conference call.

For a more comprehensive buying guide that answers not only budget-related questions but all of the most common questions IT Managers have when buying MPLS, check out our step-by-step WAN procurement Mindmap. We've distilled over decades worth or presales knowledge into one single document. (We're about to release v2!)

 

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WAN Providers Mindmap - Design vs Pricing

Stephanie with the WAN buyers Mindmap. A component of our IT Buyers Pack.

Insights into the cost of Global and UK MPLS network connectivity

1

What should IT consider?

The key approach for any company (Enterprise or otherwise) has to revolve around aligning the specifics of your organisation regarding strategy, technical, applications, security and process to your budget. 

What to expect when requesting MPLS pricing?

  • In general, the associated costs and Service Level Agreements to cover latency for application performance. Including 1Gbp/s and 100Mbp/s Ethernet, EFM and Fibre Broadband.
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  • Availability of MPLS Provider Edge reach - providers should be transparent with regards to the nodes that are available for your network across Global and UK
  • Estimates of the latency and jitter vs. your own applications including voice, video and (for example) Citrix
  • Which interconnects are available for private Cloud services, e.g. Microsoft Azure
  • Budgetary pricing
  • Any other associated services and costs for project management, service management, cloud and security
2

What are the elements which make up your MPLS cost proposal?

  • The customer edge router, the CE
  • The Ethernet tail circuit
  • The circuit type and size (Broadband, 3G, 4G, EFM, GEA, Ethernet)
  • Managed WAN services including cloud and security
  • Network monitoring, statistics and analysis
  • Adds, moves and changes
  • Contract length. 3 or 5 year terms
  • Global connectivity and reach

There is huge churn in the industry.

It’s no wonder there is a high churn within the WAN services marketplace on a global basis. The majority of Enterprise IT state that their WAN connectivity is one of the most poorly serviced aspects of their IT services vs. the cost of private MPLS & VPLS attributed to the network.

Setting MPLS pricing is important. The detail is critical to understand.

In many respects, IT Managers are facing an enormous barrage of marketing from leading telco’s / carriers / resellers with data value propositions which sound too similar. The result? They are unable to differentiate. When the value is missing, and suppliers all sound the same, what is left? Price.

While Enterprise network architecture is never just about pricing, the commercials represent a significant component of the decision-making process. VPN Pricing is always a target for IT teams, we handle requests to provide IP VPN models for budget approval on a regular basis.

The WAN has more integration with a businesses competitive edge than ever before with under performing networks creating bottlenecks to new projects, customer delivery and service.

"Budget is often required before beginning a project - whether or not you put in the work before obtaining MPLS costs or after is optional but I think readers will agree, it is necessary."

WAN Cost Visio

Above. The elements of WAN pricing.

3

Workshop your requirements vs. pricing.

  • If any readers have a current network connectivity project, consider conducting a design vs pricing workshop.
  • While using an online IP VPN services calculator is great to set budgets, the overall output is rarely fit for purpose due to the multiple elements which create the overall pricing output.
  • We have witnessed some fairly large organisations buy into MPLS or VPLS private WAN solutions on a commodity basis without aligning their specific requirements with the capability of their selected service provider.
  • The risk is significant often resulting in poor application performance and downtime.

Conducting an MPLS Cost Comparison project?

  • Business strategy
  • Networking Application flow for cloud and on-site and performance
  • IP VPN Data and Networking Security
  • Cloud applications
  • Remote Users
  • Security
  • Features such as SD WAN and Hybrid

It’s no longer right to look at one particular data area of network solutions - i.e. you cannot just solve problems with a product, there is more to consider such as change and the risks involved. We hear and talk a fair amount about solution selling but the reality is that every solution has a further impact on the business - e.g. delivery or process related.

We find further problems are created outside of the solution - what first appears to be a great win impacts the business in an unforeseen way.

It is these other aspects, outside of the solution, which require focus. And to uncover these risks requires an approach which has been developed specifically for the sector you’re working within. The focus must be on your particular business.

Strategy vs. Requirements vs. Pricing.

Those companies that use IT to gain a competitive edge work, not by looking at solutions or features and benefits, they work be leveraging IT as a business advantage. Successful network services outcomes require tight alignment of supplier and business. The solution, the service, the process and the delivery must align for a fully successful outcome.

It might be easier to relate my thoughts to a scenario

Let’s consider an Enterprise IT Manager looking to move away from a current network service provider due to service related issues. We’ll call this IT Manager, Jack. Jack decides to invite several leading suppliers in to discuss their potential offerings and their MPLS costs. Jack's experience of the typical service provider sales process has not been great in the past - lots of networking features and benefits wrapped in a weak solution selling approach. The issue for Jack is to:

  • Understand exactly where the VPN related issues exist today with the WAN
  • Be clear on the business strategy to ensure service providers can meet future requirements
  • Look at other up and coming opportunities and understand whether or not they will be impacted by the WAN
  • How to communicate his business processes to the network service provider - collaboration from both sides is key
  • How to ask the right networking questions of the service providers to force transparency with their ability
  • Consider and work through process to understand how migration might take place
  • Know the service providers pricing strategy - typical contracts are 3 years, a fair amount might change within that time
  • Ultimately, quantify the business impact of this new project
  • Consider the above vs MPLS costs and other areas such as cloud computing and security
  • Ensure upper levels of management clearly understand the project risks and opportunities

As you will no doubt be aware, every WAN service provider has different aspects, strengths and weaknesses to their connectivity. A collaborative services approach is required to understand which provider has the best ability to act as an enabler to your business.

Once an understanding is gained, MPLS costs are discussed and a deal is struck. This applies to all providers you might be considering. We appreciate that a budget is often required before beginning a project - whether or not you put in the work before obtaining MPLS costs or after is optional but I think readers will agree, it is necessary.

Our Mindmap will help you to answer the questions mentioned above.

4

Tiered service - reducing MPLS cost per Mbps.

  • With Ethernet bandwidth available as standard up to 1Gbps data speeds, overall pricing is reduced by tiering the cost per Mbps down vs the port size.
  • As an example, clients can select 100Mbps circuits with 10Mbps tier. The increments for 1Gbps services are set at 100Mbps tiers.
  • Also, selected networks offer a usage-based policy, you are only charged for the data used.

The cost of MPLS bandwidth.

The MPLS bandwidth cost for private VPN has been dramatically reduced over time, with this said, careful consideration into the quality of your service should be considered.

With the average SLA offering 5 9's up time, it is becoming increasingly difficult to differentiate between providers. The PE - Provider Edge - device represents the entry point into the providers network and, therefore, provides information on the true MPLS scale and coverage of any prospective supplier.

The majority of marketing content will profess to offer extensive network coverage but the reality is that the connectivity will be based on wholesale tail circuits rather than actual PE coverage.

3G / 4G, EFM, GEA, Broadband and Ethernet.

Lower pricing is achieved if the coverage of PE devices is higher since the tail circuit distance will be lower. Additional bandwidth charges will be made for QoS - Quality of Service - on a per Kbps and Mbps basis.

  • Expedited Forwarding - reserved for delay-sensitive voice traffic
  • Assured Forwarding - used for mission critical data applications such as Citrix traffic (for example)
  • Best Effort - where all other non-business impacting application traffic is sent such as Email
5

What are the current types of connectivity into MPLS?

  • Often, MPLS networks are complemented by hybrid connectivity including layer 2 VPLS, Short Haul Data services, Internet VPN and SD-WAN.
  • There is huge buzz around SD-WAN services right now due to cost savings of Internet connectivity.
  • MPLS remains the ONLY WAN capability offering end to end privacy and Quality of Service.

Connectivity types - 3G, 4G | Broadband ADSL | Ethernet Leased Line

3G / 4G

3G and 4G services have matured to offer a data capability for small office sites and remote users. The reasons are clear - bandwidth is available for a relatively low budget. However, IPSec is required to secure public Internet connectivity and readers should note that the packet latency is often high with 3G and 4G technology even if bandwidth appears to be sufficient. High traffic latency with poor jitter will render a voice application unusable. With this said, this type of wireless connectivity technology is available over short contract terms at a low cost.

3G and 4G offer great failover or fast start service.

Broadband / ADSL

Broadband / ADSL services offer some good technology performance vs price, especially when connected to fibre to the cabinet based exchanges. We largely recommend broadband services for smaller offices due to the unpredictable bandwidth together with reliability vs leased line equivalents.

Leased Line

We mentioned 100Mbps and 1Gbps Ethernet earlier within the article. Ethernet leased line service offer excellent uptime, predictable levels of performance and aggressive SLAs (Service Level Agreements).

6

Ethernet Resiliency and high availability MPLS Line Cost.

Ordering a second high availability circuit creates a higher cost for the failover line due the work required to avoid any single point of failure.

A second wholesale carrier local loop tail circuit will, where possible, route via dual building entry points, dual local tail circuits through to dual provider edge nodes.

No single point of failure?

Whether or not resiliency is possible is largely dependent on your locality since second fibre routes will either need to be created (costly) or may exist such as the majority of metro locations.

Excess construction costs are not commonly known about before site survey. Customers place an order for an MPLS or VPLS line, the workflow results in an engineer visiting your office to survey the site to (or “intending to”) establish whether work is required to connect your sites line to the providers network.

MPLS Pricing and Failover

Above. MPLS Pricing and Failover design.

7

Managed MPLS, security and Internet from the cloud?

  • The typical MPLS network includes both cloud-based Internet connectivity and secure cloud virtual Firewalling with packet content filtering and virus scanning.
  • This is a step change from the previous method of providing access via a standalone circuit connection at a businesses HQ site.
  • Cloud firewall security is fine for the majority of customers but those businesses which need to make multiple adds, moves and changes on a regular basis may wish to consider self-managed security services rather than a cloud-based option.

Managed services costs.

The management of an MPLS solution covers a number of areas as follows:

Router - the majority of solutions are based around managed Cisco hardware. The actual monthly recurring costs associated with the router are relatively low when compared to the circuits and ports. Dual routers will be required where two lines are provided for diversity.

Security and Cloud are equally important as MPLS when forming managed services.

Service Management - each provider deals with service management differently. Readers will find some providers allocate a dedicated service manager per account in order to provide reporting and escalation where required.

Reporting and Statistics - an area which requires scrutinisation as a good reporting tool will allow organisations to detect trends and make improvements as required. Where issues occur which may not be detected by a support department, the client is able to progress fault investigation.

Project management migration - along with statistics, migration and the processes surrounding project management resource require serious attention to detail. From a value perspective, the resource may be included or represent an additional price depending on the level of support required.

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