A leased line is service contract between a provider and a customer, whereby the provider agrees to deliver a symmetric telecommunications line connecting two locations in exchange for a rent – hence the term ‘lease’. In the UK leased lines are sometimes referred to as 'Private Circuit' or 'Data Line'.
Leased lines are stated to be more suited for businesses that conduct business online and demand fast and reliable access and zero downtime. Internet leased lines
differ from point to point lines in the respect they connect a site to the internet, whereas a point to point leased line
will connect 2 sites, without
Businesses can interconnect separate offices and buildings using a leased line which ensures that users are able to connect fast and directly to their host server or the internet anytime they want. Businesses need not have to own or deploy the connections as they can lease them from service providers. Leased lines can transfer data rates at speeds ranging from 1.5 Mbps (E1 connections) to 34.36 Mbps (E3 connections).
Another advantage of leased lines is that they have the provision to allot permanent IP addresses through which a variety of services such as mail, FTP, WWW, DNS, and proxy can be deployed. They also enable any kind of hosting service and act as a platform for enterprise intranets and extranets. Though leased lines are considered expensive they are claimed to be the ultimate in high-speed network access.
One of the main disadvantages of leased lines is that it becomes very expensive when the network gets expanded which has forced many providers to look for alternative options such as DSL and VPN. The high cost of leased lines occurs due to their installation lead-in times, cost of installation and the maintenance and access fees which often make them unaffordable to small businesses.
A low cost alternative to the leased line is the Digital Subscriber Lines (also known as DSL, ADSL, SDSL, and ADSL Max) connectivity technology. Long considered as a consumer technology, the DSL works on switching data connection technology that shares its bandwidth with a host of other customers accessing the provider's network, unless a 1:1 contention ratio is opted for, where there is no sharing of bandwidth. On the other hand Bonded ADSL takes multiple DSL circuits and creates a single virtual connection for reducing traffic congestion problems. It is also capable of offering high transfer speeds.
The advantages of DSL are that it is significantly less expensive than standard leased lines. And with the recent upgrades made possible by the Local Loop Unbundling (LLU) and the emergence of newer kind of ADSL services, DSL has shown that it can still improve further in terms of bandwidth and availability.
For businesses that are looking for a high bandwidth corporate connectivity solution Virtual Private Network (VPN) is another low cost option. Companies have to rent leased lines to obtain full and secure connectivity between their offices sites but with VPNs they can make use of public network infrastructure such as the internet to make these connections. By removing the need for long-distance leased lines and reducing long-distance telephone charges VPNs can incur considerable cost savings for businesses.
The always-on nature of leased lines exposes a company’s network to malicious threats but VPN offers security to business transactions by creating a "tunnel" through the internet from one office (site) to another. The traffic that goes through this tunnel is encrypted to protect any sensitive data.
If businesses decide to overlook the high cost factor of leased lines and go ahead and deploy them, the advantages they receive include: ability to have peer to peer Voice over IP (VoIP); share data and other services within their own servers at no additional costs; 24/7 communication facility that is dedicated and uninterrupted; businesses will have their own communications network and many more.
In the UK, surveys since 2007 have indicated that there is no significant increase in the number of customers who have opted for leased line connectivity. Customers are also realising the advantages that other technologies such as Bonded ADSL, MPLS VPNs and Ethernet offer. But still, companies that already have leased lines installed would prefer to upgrade their infrastructure rather than going for an entirely new technology that they are not familiar with. For example by installing an appropriate copper or fibre bearer users can upgrade the speed of their leased line connections.
It can be concluded that in spite of a non-growing or steadily declining leased line market and despite innovations in other technologies, leased lines are still an important part of the UK business infrastructure and its future seems far more assured.