Internet Leased Line Secrets - What Providers Don't Tell You
It's time to open our secrets box and give you the inside track on buying an internet leased line connection.
BT's Infrastructure Is Often Unavoidable... Even If You Don't Order From BT
Henry Ford wrote 'Any customer can have a car painted any color that he wants so long as it is black.'
The same is true, to some degree, when you order an Internet leased line in the UK.
You can pick any internet leased line provider you like, but in general there's a better-then-even chance that BT's infrastructure may be involved for at least part of the path from your site to your ISP's network.
BT inherited an unrivalled network of telephone poles, ducts, chambers and telephone exchanges from the General Post Office. These are managed by its Openreach subsidiary.
Often, it's cheaper for service providers to pay BT's tightly regulated Openreach subsidiary to link a customer's site to their network than to dig up miles of pavement and road in order to lay new fibre-optic cables.
This doesn't mean that everyone is just reselling the same service, however. BT is typically only used for the local bit of the path - closest to your site.
In a sizeable proportion of the country, there is also another physical rival - Virgin Media.
Carrier independent internet leased line providers such as hSo can order circuits from Openreach directly, as well as from Virgin Media, comparing the available options.
There are also a number of wholesale suppliers that use Openreach for part of the journey. For example, BT Wholesale orders circuits from BT Openreach. Similarly, TalkTalk, KCOM (outside of Hull), and Vodafone make use of Openreach circuits.
We compare wholesale prices from all of these wholesale providers, as volume discounts and other factors lead to some counter-intuitive results. Going direct to Openreach isn't necessarily the best value option for ISPs. If you'd like a custom quote for your location, use the tool at the top of this page.
Bear in mind there's more to your internet leased line than the raw connectivity from your site to your ISP. You also need Internet access, technical support, installation management, billing, installation financing, router configuration and possibly service monitoring.
Not All Leased Lines Are Delivered Using Scalable Fibre-optic Circuits
Most leased lines are based on fibre-optic circuits. But if you're only after a low amount of bandwidth - say, up to 20Mbit/s - providers may look at non-fibre options such as Ethernet First Mile (EFM) and Ethernet over Fibre to the Cabinet (EoFTTC).
These tend to be quicker to install, but can't offer as much bandwidth, so if you later need to upgrade the connection, an entirely new circuit may will need to be installed.
We suspect these services will become less popular as the Government ramps up fibre connectivity subsidies which aren't available for copper-based services.
Cutting Your Internet Leased Line's Cost
If you're out of contract on your existing leased line, it's time to shop around. Leased line prices tend to fall over time, so it's likely you can now get more for your money.
To get the best price, it pays to be open to getting a new circuit installed, rather than just re-sign to continue using your existing connection. Often the existing wholesale provider will try to price-gouge your leased line provider, assuming that they (and you) will be willing to pay a bit extra to avoid the hassle of getting a new line installed. Our advice: call their bluff.
Being open to making such a switch may give your leased line provider greater flexibility over which wholesale supplier is used.
Some large providers' retail arms are forced to buy circuits from their own company's infrastructure or wholesale divisions. Other providers, known as 'carrier independent' providers, are free to pick-and-choose carriers to suit your requirements.
How The Savviest Customers Use Their Internet Leased Lines
Most firms just use their leased lines for general web browsing and email. They are missing a trick. Savvier customers are taking a different approach.
If they have a wide-area-network, they often buy Internet centrally, allowing all their sites to share a common pool of Internet bandwidth. This saves money and makes it easier for them to monitor internet usage... as only one monitoring device is needed. The WAN allows IT resources (such as Email servers and PBXs) to be used by multiple sites, aiding server consolidation and simplifying IT support.
The savviest firms tend to have eliminated ISDN already and are using their leased lines to carry phone calls. Either SIP trunk calls made by an on-premise PBX, or VoIP calls from phones to a cloud-hosted PBX service. Often, these voice services traffic streams will be given priority over other traffic on the leased line.
Another popular option is to roll-out homeworking/remote-working options, using the internet leased line to carry remote-desktop-protocol related data streams. This allows the firm to reduce the amount of office space it rents and helps reduce staff turnover.
Finally, we find the savviest customers tend to use cloud services, reducing the number of servers they need to maintain. Some, such as Microsoft 365 (and it's little brother Office 365) are useful to organisations of all sizes. Others, such as AWS and Azure cloud services tend to be good for the more technically sophisticated firms, including larger organisations with substantial in-house IT teams.
A common factor here is that the leased line is used to cut costs and simplify the IT estate.
SD-WANs and MPLS Are Misunderstood
Leased lines have been around for ages, which makes them boring. Some providers try to overcome this by focusing on particular technologies that aren't as well known. If there is a technology acronym denoting something few people really understand so much the better!
For many years, MPLS (multiple protocol label switching) was that new-shiny-acronym touted by internet leased line providers as the best thing since sliced bread. But now it's become a little too mainstream, so they're painting MPLS as old hat, and SD-WAN (software-defined wide area network) as being the shiny new must-have.
As an SD-WAN provider, an MPLS network provider and an Internet leased line connectivity provider, we're in a good position to set the record straight.
SD-WAN is currently extremely over-hyped and MPLS is very far from dead. In fact, MPLS is in much greater use than SDWAN. With gigabit broadband likely to become commonplace by the mid-to-late 2020's, SD-WAN may never even take off. Why get an expensive box to bond together lots of internet connections if a single dedicated connection can provide all the bandwidth you need?
For giant multi-nationals with hundreds of sites, SD-WAN does a lot of sense. It allows the organisation to exercise central control over lots of sites and roll out prioritisation changes to all sites simultaneously - including to sites where there are no IT staff on site. If you just have a few locations, and those locations only have the option of fibre leased lines or FTTC broadband, there's not much point in forking out for costly SD-WAN hardware.
Over time SD-WAN functionality is likely to become standard in leased line routers and enterprise firewalls. Until then, don't bet on SD-WANs taking over.
Regulation will Massively Impact Future Leased Line Tariffs... Saving Your Firm A Fortune
OFCOM is a smart, politically-savvy regulator. It knows that UK politicians are falling over themselves to promise investment in full fibre broadband throughout the UK, but that the economic case for creating full-scale fibre networks to rival BT's - totally independent of BT's physical infrastructure - don't stack up.
So it is primarily focused on encouraging competition at wholesale and retail levels. For many years, this has been working well at the retail level. You only have to see the huge falls in broadband prices to see that. They've been so big that the market has consolidated, so that consumer broadband is overwhelming provide dby a handful of giant ISPs like BT, Sky, Virgin Media and TalkTalk. But that revolution is largely over.
Regulation is working well at the wholesale level too. This is the level which tends to impact internet leased line prices the most. Local loop unbundling allowed TalkTalk Business to become a credible rival to BT Wholesale in much of the country. Vodafone and Sky have both dipped their toes in the wholesale market - seeking to monetise the DSL assets they've built for serving the residential market. There are also a handful of full-fibre broadband companies using BT's ducts to lay their own fibre networks in dense urban locations and business districts. Over the early 2020's some will extend their networks into major towns. This will create far more competition at the wholesale level, driving down leased line connection prices in much of the country.
EU state aid rules have made it fiddly for UK politicians to subsidise the roll-out of fibre. Despite the vote for Brexit, this is unlikely to change, as any deal with the EU is likely to require the bulk of the current restrictions. Subsidies are likely to remain concentrated on voucher schemes to help SMEs, subsidies to rural areas, and subsidies for suburban areas where there's a takeup-related subsidy-clawback mechanism. These subsidies come with lots of caveats - including that the subsidy just pay towards verifiable installation expenses, not running costs.
BT has said it intends to retire the old phone network (the PSTN, including ISDN services) around 2025. Pretty much all wholesale and retail providers - as well as the regulator and politicians - are happy for this to take place, even though it involves the forced migration of millions of residential customers and SMEs away from legacy services. BT will be able to cut its network maintenance costs (gradually axing many jobs and many of its 5600 telephone exchanges). As a quid-pro-quo for allowing this forced migration, regulators will ensure that most of the benefits get passed to BT Openreach customers - big consumer ISPs, wholesale providers and internet leased line providers.
The rationalisation of the telephone exchange estate will make it easier for rivals to BT Wholesale to create rival networks (with BT's infrastructure at the local edge) will involve setting up far fewer fibre links. Forget having to buy circuits to 3000+ telephone exchanges! The result will be a lot of second-tier ISPs will be able to compete nationally with big wholesale providers. This will cause internet leased line retail prices to fall. The massive growth in residential broadband speeds will lead to a huge increase in backhaul capacity, demand for Internet transit and demand for Internet peering. The result on prices is obvious: More bandwidth for far less money.
The Future: Cheaper, Faster Connectivity, Installed Sooner, On Shorter Contracts
This will make internet leased lines affordable for poorer SMEs that previously had to settle for fibre broadband.
Expect 10 Gigabit/s and 100 Gigabit/s internet leased lines to become far more common, as suppliers try to overcome the price falls by offering big capacity increases. Right now, few firms could use that much bandwidth. But that will change.
We're heading towards a future where few firms bother to host their own servers, storage devices and PBXs on site. Those services are heading to the cloud, where additional capacity is just a few clicks away within a customer portal, support is increasingly provided 24/7, and everything is rented with no up-front charges.
At that point, regulatory pressure will likely shift towards improving leased line installation times, and possibly allowing local leased line circuits to be transferred from one provider to another with minimal downtime. This sort of thing has already been mandated by regulators in respect of phone numbers, broadband and bank accounts. Leased line circuits will eventually get their moment. With faster installation and switching, you can expect competition to increase, prices to fall, and contracts to become shorter.
