Carrier Ethernet vs MPLS: Choosing the Right Solution

When building or upgrading your company's wide area network (WAN), you will likely encounter two prominent technologies: Carrier Ethernet and MPLS.

Both are mature, high-performance solutions for connecting multiple business locations, but they operate differently and are suited for different scenarios.

Understanding their core differences in architecture, cost, and scalability is key to selecting the right network for your organization's specific requirements.

What is Carrier Ethernet?

Think of Carrier Ethernet as an extension of the familiar Ethernet technology you use in your office's Local Area Network (LAN). It’s a standardized service that allows businesses to connect multiple sites across a metropolitan or wide area network with high performance.

• It’s a Layer 2 service: Carrier Ethernet operates at the Data Link Layer of the OSI model. This means it forwards data based on MAC addresses, making it a straightforward extension of your existing LAN environment.
• High bandwidth and scalability: It is typically delivered over fiber optic networks and can provide scalable, dedicated bandwidth from as low as 10 Mbps to over 100 Gbps.
• Flexible configurations: The service can be set up in various ways, including point-to-point connections to link two sites or multipoint configurations to connect a central office to multiple branches.

What is MPLS?

Multiprotocol Label Switching, or MPLS, is a routing technique that directs data from one node to the next based on short path labels rather than long network addresses. This approach avoids complex lookups in a routing table, creating a private, high-performance network managed by a single carrier.

• It’s a Layer 2.5 service: MPLS operates between the Data Link Layer (Layer 2) and the Network Layer (Layer 3). It uses labels to forward packets, which allows it to carry various types of traffic, including IP packets and Ethernet frames.
• Traffic engineering: A key feature of MPLS is its ability to manage and prioritize traffic. It can create specific paths for different types of data, ensuring that critical applications like VoIP or video conferencing receive the necessary performance.
• Private and secure: Since MPLS creates a private network isolated from the public internet, it offers inherent security for inter-office data transfer.

Key Differences Between Carrier Ethernet and MPLS

While both connect your business sites, their underlying mechanics create important distinctions in performance, cost, and management.

Network Layer and Control

Carrier Ethernet operates at Layer 2, acting as one large, extended LAN. This gives your IT team more control over IP routing (at Layer 3) using your own equipment.

In contrast, MPLS is a Layer 2.5 service where the provider manages the routing paths within its core network. This means less direct control for you but a fully managed transport service.

Cost Structure

Generally, Carrier Ethernet services tend to be more cost-effective. The technology is simpler and more standardized, often resulting in lower monthly costs for the same amount of bandwidth.

MPLS networks typically come with a higher price tag. This premium covers the carrier's management overhead, built-in security, and advanced traffic engineering capabilities.

Quality of Service (QoS)

A major selling point for MPLS is its native support for Quality of Service. The network can prioritize latency-sensitive traffic like voice and video over less critical data from end to end.

Carrier Ethernet does not inherently include this level of traffic prioritization. While QoS can be implemented, it often requires additional configuration and management on your end to be effective across the WAN.

Benefits of Carrier Ethernet

• Simplicity and Familiarity: Because Carrier Ethernet is based on the same technology as your office LAN, your IT team can manage it without needing specialized training. This simplifies network administration and troubleshooting.
• Cost-Effectiveness: It is often more affordable than MPLS for equivalent bandwidth. The use of standardized equipment and a simpler service structure translates directly into lower monthly operational costs for your business.
• Scalable Performance: Carrier Ethernet makes it easy to adjust your bandwidth as your business needs change. You can quickly scale services up or down, often without requiring new hardware installations.
• Greater Network Control: As a Layer 2 service, it gives your team full control over your Layer 3 routing and IP address management. This is ideal for organizations that prefer to handle their own network policies.

Benefits of MPLS

• Guaranteed Application Performance: With its built-in Quality of Service (QoS), MPLS can prioritize critical traffic. This ensures that real-time applications like VoIP and video conferencing operate smoothly without jitter or lag, often backed by carrier service level agreements (SLAs).
• Enhanced Security: Traffic on an MPLS network is isolated from the public internet, creating a private communication path between your sites. This inherent separation significantly reduces exposure to external cyber threats without requiring additional encryption tunnels.
• Simplified WAN Management: The provider manages the network's core routing and traffic paths. This frees your IT team from complex WAN administration, allowing them to focus on other business-critical tasks.
• Any-to-Any Connectivity: MPLS networks naturally support a mesh topology, enabling any location to communicate directly with another. This is highly efficient for organizations with significant inter-branch data exchange.

Choosing the Right Solution for Your Business

The best choice depends entirely on your organization's priorities, budget, and technical needs. The decision often comes down to a trade-off between cost, control, and managed performance.

When to Choose Carrier Ethernet

Opt for Carrier Ethernet if your primary goal is getting the most bandwidth for your budget. It is ideal for simpler network designs, such as high-capacity point-to-point connections between a headquarters and a data center.

This solution is also preferable when your IT team is equipped and desires to manage its own IP routing. Since it operates at Layer 2, it gives you direct control over your network's Layer 3 traffic policies.

When to Choose MPLS

Consider MPLS when consistent application performance is non-negotiable. If your operations depend on crystal-clear VoIP calls or smooth video conferencing, the built-in QoS of an MPLS network provides that reliability.

It is also the superior choice for organizations that require a secure, private network connecting many locations in a mesh topology. The service provider handles the complex routing, reducing the management burden on your internal team.

Final Thoughts on Carrier Ethernet vs MPLS

Ultimately, the decision between Carrier Ethernet and MPLS hinges on your organization's specific priorities.

If your focus is on maximizing bandwidth for your budget and maintaining direct control over your network's routing, Carrier Ethernet is a strong contender.

However, if reliable application performance for services like VoIP and a secure, managed network are your top requirements, MPLS remains the more robust choice.

Carefully evaluating your application needs, budget, and IT resources will guide you to the right solution for your WAN.

Need Help Managing Your Network? Lightyear Can Help

Whether you land on Carrier Ethernet or MPLS, the next challenge is procurement. Lightyear automates the entire telecom lifecycle, helping you source competitive quotes, manage your network inventory, and consolidate billing into a single monthly statement.

By automating network service procurement and management, enterprises using Lightyear achieve over 70% in time savings and 20% in cost savings.

Schedule a demo or get started with our questionnaire today.

Frequently Asked Questions about Carrier Ethernet vs MPLS

Can I use Carrier Ethernet to connect to cloud services?

Yes. Carrier Ethernet provides a direct, high-bandwidth connection to major cloud providers. This offers more reliable performance and security than connecting over the public internet, making it ideal for cloud-dependent applications.

Is MPLS becoming obsolete with the rise of SD-WAN?

Not entirely. Many businesses now use a hybrid approach, keeping MPLS for performance-sensitive traffic while using SD-WAN for other data. This strategy balances the reliability of MPLS with the flexibility and cost-effectiveness of SD-WAN.

Do I need to add my own encryption to these services?

It's highly recommended. While an MPLS network is private, traffic is not typically encrypted by the carrier. For true data confidentiality on either service, you should implement your own end-to-end encryption, like IPsec VPNs.