Leased Lines

Leased Lines

| Staff writer

Leased line definition

A leased line is defined as a dedicated high-performance circuit leased by a common carrier between a customer and a service provider’s network. It is rented on an annual basis and usually carries voice and data or both. It can be used for internet access or for a private connection between two customer sites. Compared to other internet connectivity options such as DSL products, leased lines are relatively expensive but are supported by a comprehensive Service-Level Agreement (SLA) with a guaranteed fix time and a compensation clause. Leased lines are also often a component of site to site connectivity solutions that require resilience. 


Leased line costs

Leased lines have both an installation cost and annual rental cost.  The annual rental will depend on the bandwidth required (2MB – 10GB) and can be from as little as £300-£400 per month. However, this will rise with distance from a service providers Point-of-Presence (PoP). So the headline offers of ‘from £ x per month’ are for the best case scenario of being next door, or actually in the same building as the PoP. In metropolitan areas (large cities) where there are lots of PoPs in close proximity, it’s no surprise that the best deals are available. But in more remote areas, where the distance from the nearest PoP is measured in miles rather than metres, the monthly / annual costs increases significantly.
Bear in mind that the ‘set-up’ cost is a one-off cost in addition to the annual rental. As with annual rentals, set up costs vary depending on location. If for example you are located in an office block in London or Manchester, the chances are there may already be ‘fibre in the building' from a telecommunications company (BT, COLT etc). Hence, they won’t need to dig the road up to lay new lines. Set up costs may be £1500 or lower, or even amortised over the contract term, in effect negating any capital expenditure.  It's always a good idea obtain leased line quotations from several providers so that you can compare costs relative to your location.
However, if you’re at a remote location miles from anywhere, then getting a leased line connection will require a more significant capital expenditure upfront. The Catch-22 is that a service provider will rarely be able to commit to what this capital expenditure will be until they have completed a site survey. And just for good measure, they won’t carry out a site survey until you have signed a contract. The latter is encouraged on the basis that if the site survey presents an install cost unacceptable to the customer, the contract can be cancelled. But that still leaves the customer, often months down the line, without any leased line connection and exasperated.

Leased line providers

In the UK, although BT is the dominant supplier of leased lines to medium sized businesses, there is a growing use of alternative providers. Service levels, pricing and customer service are cited as reasons for selecting alternative providers. Other leased line providers include AT&T, Claranet, COLT, Demon, Global Crossing, Kingston, Nildram Opal, Star, Telstra, Verizon, Virgin Media, and Vodafone.  In addition there are many more providers to SMBs.  You can compare business ISPs providing leased lines by accessing this guide.
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