TCO of MPLS-TP versus IP/MPLS

ACG Research has done an interesting TCO of MPLS-TP versus IP/MPLS showing there is a huge
reduction of Total Cost of Ownership (TCO) in MPLS-TP versus IP/MPLS. The analysis was done
in two environments: Native Packet transport on MPLS-TP versus IP/MPLS and second one using
TDM/Packet mix on MPLS-TP versus Circuit emulation on IP/MPLS. The platform used for MPLS-
TP was from ECI Telecom. Further and most importantly Mobile backhaul was chosen as the
network for analysis purpose.

http://www.acgresearch.net/tcos/eci-telecoms-mpls-tp-npt-solution.aspx

The analysis proved a couple of things:

1. The TCO (CAPEX and OPEX) over 5 years for pure packet transport using MPLS-TP is 55%
lower compared to IP/MPLS.

2. When TDM services were added to the network. CAPEX on ECI NPT solution increased by 5%
while the Circuit emulation addition on IP/MPLS increased its CAPEX by 37%. The 55% OPEX
saving in the first study increased to 64% when TDM traffic was added.

The high reason for the OPEX on IP/MPLS was attributed to the need for highly skilled technical
staff needed to maintain IP/MPLS network compared to MPLS-TP.

Among OPEX, things like Network care, training, Network patches and upgrade, cooling cost, Power
cost, Service contract were compared. In all cases the OPEX cost for MPLS-TP were lower
compared to IP/MPLS.

The results thus proved that MPLS-TP being a simpler technology contribute to much lower OPEX
and CAPEX when used in metro networks and as such should be favored by the Operators if
deployment is needed in Access or Metro areas.