Using MPLS Networking to Improve Data Transmission in China

Posted by Reading Time: 6 minutes

By Hugo Butcher Piat

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Multi-protocol label switching (MPLS) is a recent technology used to transmit data between two locations. MPLS achieves this with greater speed and consistency than conventional networking methods.

MPLS makes better use of existing network infrastructure, usually only requiring one new link to be set up for its implementation. However, the associated cost of this technique is commensurate to its added value.

In this article, we outline what MPLS networking entails and the value this networking technique offers for corporate users in China.

What is MPLS?

The conventional networking method used by most companies is Internet Protocol (IP) networking. The IP method involves an address (the IP address) as the only known information to direct data from point A to point B. This data is unlikely to travel directly to the address, but rather via several networks during the transmission.

A fitting analogy is that of a product bought on Amazon or Taobao. If you purchase a product on one of these platforms, you can use a function to track the package’s delivery status. As you track the package from the source to your address, the package is subject to a series of shorter networks, such as a logistics company, customs checks, and so on, which make up the larger network. Eventually your package arrives at the final destination.

Data travels in much the same way, except these logistics and checkpoints are replaced with data paths (such as cables) and routing hubs, which link the paths together. Along the way, that data competes with other data across these networks. This competing network traffic may affect data quality by delaying it, just as a traffic jam would delay a logistics truck.

In contrast to this standard method, the MPLS networking technique essentially offers a customized network for the data to travel through. A label is attached to data, which details a predetermined path for the data to follow to the final address.

This method accounts for potential network traffic issues, resulting in more stable and consistent data transmission. Going back to the delivery logistics analogy above, this would be the equivalent of having your own dedicated service that bypasses the road traffic and checkpoints that standard packages must pass through.

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MPLS delivers increased network stability

MPLS technology can remedy issues relating to network delays, and several others, by dedicating a network for data communications. MPLS offer three applications to achieve this.

  1. Traffic Engineering (TE)

Traffic Engineering refers to the concept mentioned above, where the data path is customized to take advantage of the most efficient paths. Well-engineered traffic leads to a more stable connections and higher speeds than relying on the standard internet, which is less predictable.

Example: if you make a phone call on a regular cellular network, or even on Skype, and that call cannot connect, this is the result of high congestion.

  1. Quality of Service (QoS)

Quality of Service assigns priority to tasks of importance to a company’s operations.

Example: if lag-free video conferencing with clients is a key function to a company, it can be assigned with the highest priority. Then, other data vying for the bandwidth will not be able to compete with that bandwidth allocated for the video conferencing.

  1. Virtual Private Networking (VPN)

A virtual private network secures data through encryption. This is not an automatic feature of MPLS; it must be implemented in addition to MPLS.

Example: an MPLS network can still be fooled by computers acting as a node in the network in certain circumstances. For this reason, a VPN is recommended for highly sensitive data networking.

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The common data types that would benefit from an MPLS network include:

  1. Audio data (eg. VoIP calls)
  2. Video data (eg. video calling and conferencing software)
  3. Enterprise applications (eg. ERP systems)

Audio and video data tend to consume larger amounts of bandwidth. Such data also requires low latency. This means that the time between the data leaving the sender and reaching the receiver should be as low as possible. Implementing an MPLS network aims to offer lower latency than that of standard networks.

Alternatively, if an ERP system is of higher priority to your company’s operations, this can take priority over other data and be assigned with the necessary bandwidth.

In short, the key functions of your business are the priority, as opposed to a standard internet connection where all data is equal and must queue in the internet traffic.

Cost of implementing MPLS

Keep in mind that MPLS networking is a technique. Therefore, the costs associated relate to the use of a provider’s network. There are no costs associated with infrastructure purchases, such as routers, cabling, and the like.

Internet Service Providers (ISPs) in first-tier cities, such as Beijing, Shenzhen, and Shanghai, tend to offer relatively lower prices than second-tier and third-tier city providers for MPLS networks. ISPs include China Telecom and China Unicom, which sub-contract their bandwidth to vendors who then provide the MPLS service to clients.

Some vendors may have their own infrastructure or a dedicated ocean cable, which both contribute to a more stable service. These two factors are ideal, and key considerations when selecting a vendor.

A 4Mbps (megabit per second) MPLS Link in a first-tier city would cost in the range of US$800-1000 per month. In second-tier cities, this price would increase by around 20-30 percent. Such estimates are approximate and depend upon the ISP’s infrastructure presence in the target city, as mentioned above.

To clarify what this means in a more practical sense, consider the following situation. 1Mbps is required for a good quality HD-video call between two parties, and a 1.5Mbps connection would ensure this. For every extra participant in a video call, approximately 1Mpbs should be added. Therefore, for a 4-party video call, a minimum of 4Mbps would be a safe allowance, and ideally 5-6Mbps.

In addition to standard network costs, also consider any one-off set up costs which may be required. Finally, be sure to clarify the service term of your networking agreement, which is generally set at 24 months.

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Act according to needs

Selecting an MPLS network vendor depends upon both the location city of your China office and the target destination outside of China. Some country-specific providers include Orange (France), Deutsche Telekom (Germany), HKT (Hong Kong), and Telstra (Australia).

The Hong Kong provider HKT, for example, connects offices in Chinese first-tier cities to Hong Kong for around US$700-1,000 per month,  in addition to a one-time setup fee. Again, these are approximate prices to frame the potential costs associated with an MPLS network.

When selecting a provider, select one that can provide a testing platform, which measures network latency (speeds) and reliability. Also, providers with their own Network Operations Center (NOC) are favorable, as it simplifies the procedure for rectifying any issues or maintenance in future. Finally, consider where these NOCs are located and how this may affect any communication (for instance, Hong Kong-based centers would house English and Cantonese speaking staff).

Although it comes at an added cost compared to traditional networking options, MPLS systems can significantly improve the quality of a company’s network. This is particularly beneficial for users that frequently communicate with offices located outside of China, as the country’s notorious internet controls make data transmission less reliable compared to many other countries.

When adopting MPLS networking in China, businesses should consider the needs of their company, what they aim to achieve via the technique, and take stock of their available resources and location-related issues that may arise. Successful implementation MPLS can greatly improve network performance in a country where internet-use is a perpetual challenge.


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China Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices in China, Hong Kong, Indonesia, SingaporeRussia, and Vietnam.. Please contact info@dezshira.com or visit our website at www.dezshira.com.

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