Almost every business today wants internet and phone connectivity. Be it a restaurant or a shoe retail store, a broker agency or a bat manufacturing station, the internet and phone have become a necessity for various business operations.
A leased line is a channel that provides your business with high-speed and uninterrupted connectivity. Let’s know about it in detail – the definition, uses, benefits and whether it should be employed by your business or not.
What is a leased line?
A leased line is a dedicated, fixed-bandwidth connection between two locations, typically used by businesses for reliable and fast-speed internet or private network communications. Unlike standard broadband, which shares bandwidth among multiple users, a leased line provides exclusive use of the line, ensuring consistent performance and security.
For example, a digital marketing agency with offices in Liverpool and Leeds might use a leased line to stay connected via uninterrupted data transfer, VoIP and video conferencing between the locations.
Two of the main characteristics of a leased line are the following:
- They are leased and dedicated. Leased in the sense that they are rented from an internet provider and dedicated in the sense that the bandwidth has been reserved solely for your use, along the entire line. There are no partners.
- They are symmetric which means the upload and download speeds are the same. This is particularly useful if most of your business involves sending large files, hosting multiple websites on the server and using VoIP telephony.
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How does a leased line work?
Generally, leased lines operate over fibre optic technology, the most advanced medium for data transfer. Fibre optics use light pulses to transmit data through fibre lines, offering high-speed capacity and greater resistance to electromagnetic interference compared to traditional copper lines.
Fibre optics provide the following benefits:
- High speed, because it allows faster data transfer rates.
- High reliability, because the cables are less prone to electromagnetic noise.
- Cost-effective, because they are durable and cost less to maintain than the copper lines.
Types of leased lines
There are 3 types of leased lines, arranged in order of price, the first one being the most expensive.
- Fibre Ethernet: These lines use fibre optic cables to deliver high-speed network connections up to 10 Gbps. They provide the fastest data transfer rates and are ideal for businesses requiring robust connectivity for bandwidth-intensive tasks such as video conferencing, large data transfer and cloud computing.
Fibre Ethernet is known for its low latency and the ability to maintain consistent speeds regardless of the distance between the business and the service provider.
- Ethernet in the First Mile (EFM): It uses copper telephone lines to deliver high-speed internet, typically offering upload and download speeds in the range of 2Mbps – 35Mbps. EFM provides symmetrical speeds and is thus beneficial for applications like VoIP and cloud services. It is often used in areas where fibre infrastructure is not yet available but a stable connection is necessary.
Generally, 2-8 pairs of copper lines are used which means if one pair fails, the remaining ones continue to provide the service.
- Ethernet over Fiber to the Cabinet (EoFTTC): It uses fibre optics to the street cabin and then copper lines to the premises. This setup typically offers download speeds up to 80 Mbps and upload speeds up to 10-20 Mbps and is suitable for small to medium-sized businesses that need a balance of performance and cost-efficiency.
Applications of leased lines
- Internet connection: The first major application is the dedicated internet connection. It provides businesses with a reliable and high-speed internet connection that improves their performance. This is crucial for businesses that rely heavily on internet for their operations like e-commerce, digital marketing and tech industries.
- Site-to-site connectivity: Leased lines create a private network between multiple business locations. This allows for secure and high-speed data transfer which enhances collaboration and communication.
- Video conferencing: The third application is the VoIP and video conferencing. They provide businesses with uninterrupted connectivity in both regards. Since the bandwidth is dedicated and the latency is low, businesses can conduct clear and real-time voice and video communication efficiently.
Advantages & disadvantages of leased lines
Advantages
Some of the major benefits of leased lines include:
- High speed: Leased lines offer symmetrical bandwidth which provides consistently high upload and download speeds up to 10 Gbps. The most common speed is 2 Mbps to 10 Mbps but 100 Mbps is becoming popular as well.
- Reliable internet: With a dedicated line, there is no sharing with other users, which results in minimal disruptions and higher reliability. Many leased line providers offer Service Level Agreements (SLAs) to guarantee an uptime of 99.99%.
- Better security: Leased lines provide a private connection that reduces the risk of data breaches and cyberattacks.
- Wide applications: They deliver low-latency connections, which is essential for real-time applications such as VoIP, online gaming and financial trading.
Disadvantages
Here are some disadvantages of leased lines:
- Costly: It is more expensive than a normal broadband connection. While a broadband line costs around £20-£50/month, a full fibre leased line would cost upwards of £600/month for a fast internet speed.
- Long installation time: It takes a lot of time to be installed. Because the line has to be placed between 2 endpoints, it can take 60 days to 4 months for the lines to be installed. It also depends on the distance and the type of topography and construction facilities available.
Difference between a leased line and a broadband connection
Leased lines and broadband are both ways of internet connectivity but are different e.g. leased line provides dedicated internet while broadband is shared among users. And a leased line costs more than broadband.
The rest of the differences are shown in the table below.
| Factor | Leased line | Broadband connection |
|---|---|---|
|
Technology |
Dedicated fibre, copper or a mixture of both. |
Shared Digital Subscriber Line (DSL), cable or fibre. |
|
Cost |
Higher, due to dedicated service. |
Lower, because it’s shared among multiple users. |
|
Usage |
Exclusive to the subscribing business. |
Shared among many users. |
|
Reliability |
High, with SLAs guaranteeing uptime. |
Moderate. Subject to the network traffic. |
|
Installation time |
Takes a long time (1.5-4 months), due to the custom setup. |
Takes less time because the existing infrastructure is used. |
Should I purchase a leased line for my business?
Before choosing whether a leased line is a suitable fit for your business, look at the following considerations.
- Can I afford a downtime? Generally, the Service Level Agreement for leased lines says the error will be fixed within 4 hours. With broadband, however, this time can be anywhere between 24 to 48 hours. If you can not afford a downtime of more than 4 hours, you should consider a leased line.
- Does your business use latency-sensitive applications? If your business is dependent on such applications like online gaming, VoIP, industrial automation and financial trading, you might want to shift to a leased line because latency issues will result in connectivity delays and lags that can hamper the efficiency of your business processes.
- Can I pay the cost of the leased line? A leased line will generally cost you 8-10 times the cost of broadband, so see if this falls in your budget or not.
- Does my business operations survive without a dedicated line? If all your operations can be fulfilled with a high-speed broadband connection, you should not consider switching to the expensive leased line.
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Installing a leased line typically takes 60 days to 4 months. The exact timeframe depends on factors such as location, infrastructure requirements, and type of line (wired on wireless). Coordination with local authorities and property owners may also impact the duration.
A leased line is a dedicated line that provides internet connection between 2 locations. A VPN uses a public internet connection to create encrypted and secure tunnels for data transmission.
The first reason why leased lines are expensive is because it is uncontented. The entire price of the bandwidth falls upon you rather than being shared. The second reason is that it involves the installation of physical fibre optic which is expensive. Also, the installation takes 1.5-4 months, which incurs a lot of costs as well.
