What Is A Leased Line?

Have you heard of a leased line internet connection? Many have but don’t know what it is or how it differs from other types of internet connection. So what is a leased line internet connection?

A leased line internet connection is a private telecommunications circuit connecting two or more locations. For example, your building and the telecommunications provider’s building. Leased lines are also known as private circuits.

I hope you’ll leave this blog post with all the knowledge you need about leased lines, as we cover what they are, how much they cost, and whether or not your business needs one. Keep reading for our all-you-need-to-know guide about private circuits!

What Is A Leased Line?

As I said, a leased line is a private telecommunications circuit connecting two locations.

A leased line is a fixed-bandwidth, symmetric data connection. This means the data transfer rate is always the same, and the downstream and upstream speeds are exactly the same.

A private circuit is usually full fibre. As you may know, fibre cabling is the ideal type of cabling for superfast data transfer rates between two locations.

Leased lines have numerous uses. For example, you can use a leased line to:

  • Connect to the internet: It is possible to use a leased line to connect to the internet. In this case, the leased line would be a dedicated connection between your building and the telecommunications provider. A leased line can provide guaranteed symmetric speeds of 20Mbps all the way up to 10Gbps. The speeds available will depend upon your location but also what you can afford.
  • Transfer data between two or more offices: If you need to connect two offices together, a leased line is the perfect type of connection. You can extend the network capabilities across two sites using a leased line, which could be beneficial to some businesses. For example, businesses where separate offices need to be closely intertwined. For instance, offices that regularly work together on projects and need access to the same files quickly and reliably.
  • Connect two telephone systems: Leased lines can also be used to connect two PBXs and bypass the PSTN. Depending on the number of calls between the two locations, it can make sense to have a leased line connecting the two. These days, this type of deployment often doesn’t make much sense due to the rise of IP telephony. IP telephony tends to be significantly cheaper than traditional telephony, so the cost savings are insignificant.

In most cases, leased lines are used by large businesses where fixed-bandwidth and symmetric speeds are crucial. Whether it’s a fast internet connection that’s essential or rapid data transfer rate between two offices, a leased line is often a premium, reliable solution.

How Does A Leased Line Work?

So a leased line can provide your business with superfast, symmetrical speeds. Let’s take a look at how this brilliant technology actually works.

A leased line uses the same technology as fibre optic broadband connections such as FTTP. Data is transmitted through fibre optic cabling using pulses of light. The pulses of light bounce off the walls of the cable, thanks to a thin layer of glass wrapped around the central fibre. This means the pulses of light can continue to travel at superfast speeds until they reach their destination without any slow down.

These pulses of light travel at, unsurprisingly, the speed of light. Electrical signals travel slower, which is why fibre optic cabling is much faster than copper connections such as ADSL. Furthermore, fibre optic cabling has much greater bandwidth than copper wiring. Fibre optic cabling can carry a significantly larger amount of data at any given time as a result.

It’s also worth noting that a leased line is always uncontended. An uncontended line is a connection that you share with no one. It is a direct connection between two places, such as your office and the telecommunications provider. The vast majority of other internet connections are contended, which means the line into the roadside cabinet is shared amongst a number of businesses.

The superfast data transfer rates that you get with a leased line can be fully utilised only when paired with the right equipment. At each end of the line, you have equipment responsible for transmitting and receiving the pulses of light. This equipment is also responsible for deciphering the data. If you’re using equipment that isn’t up to the job, you won’t have the full potential of your connection.

Now for the important question. How much does a leased line cost?

How Much Does A Leased Line Cost?

We’ve raced through what a leased line is, how they can be used, and how they work. But how much is a leased line going to cost your business per month?

The answer to this question depends on innumerable factors. However, here are some of the biggest variables that affect how much a leased line will cost your business:

  • Speeds: The speeds you choose will affect greatly the amount your business has to pay for a leased line. If you choose 20Mbps symmetric speeds, it will inevitably be cheaper than 100Mbps symmetric. A leased line can cost as little as £150 per month to thousands of pounds per month. The speeds you decide on has a big effect.
  • Location: How close are you to the nearest exchange? Or rather, how easy would it be to get a line directly from the exchange to your property? Location does have a sizeable impact on how much a leased line will set you back. For instance, let’s imagine there are two businesses: one based in the middle of nowhere, the other based in the city centre. A lot of the infrastructure is ready to go in the city centre and the business likely isn’t far from the exchange. On the other hand, the business in the middle of nowhere is probably far from the exchange. The installation will take longer and require more cabling, hence increasing the costs significantly.
  • Contract Length: The length of your contract will also affect how much you pay for a leased line. Typically you will pay more if you choose a shorter contract, because of the installation costs. On longer contracts, such as 3 and 5 years, the provider recoups the installation cost over the contracted period; often you won’t have to pay anything upfront as a result. However, if you sign a 1-year contract, you’ll have to pay for the full installation upfront as well as a higher monthly charge.

It’s impossible to say how much a leased line will cost your business without knowing where you’re based, the speeds you need, and the length of contract that you are interested in. However, to give you a rough ballpark figure of the minimum you’ll pay, a leased line usually costs a minimum of approximately £150 per month.

Leased lines can cost thousands of pounds per month depending on the variables I mentioned above. To get an accurate idea of what you’d be paying, you’d have to speak to a provider and explain your circumstances. Fortunately, there are many providers out there offering free quotes and consultations.

Do You Need A Leased Line?

Again, the answer to this question depends heavily on your circumstances. How does your business depend on its internet connection? How many users do you have? How many of your business processes rely on a stable internet connection?

The answers to these questions and many more will help you to determine whether or not you actually need a leased line.

Without knowing anything about your business, I would say the following. Most small and medium-sized businesses will not need a leased line. If you use the internet but you aren’t ultra-reliant on it, there are many other types of internet circuit that will meet your requirements.

If your business is an SME but you are highly dependent on your internet connection, it might be a different matter. If your business really couldn’t function without its internet connection, it makes sense to invest heavily in a service that will definitely meet your requirements. For example, if your business designs games and you need to regularly receive and transmit files, a standard connection, with all the associated issues, may not suffice.

For larger businesses, with 100 or more employees, a leased line is probably the best internet connection depending on how your business works. If you and your team all work remotely, a good internet connection isn’t essential. But if you have hundreds of people working in one office, all relying on the internet, you must ensure you have a suitable connection. In this scenario, a leased line would be a good investment.

Jack Mitchell

Jack Mitchell has been the Operations manager at telecoms and MSP Optionbox for more than 4 years. He has played a crucial role in the company, from marketing to helpdesk, and ensures that the IT requirements of over 300 clients are continuously met. With his innate passion for technology and troubleshooting and a particular interest in Apple products, Jack now delivers the most comprehensive tech guides to make your life easier. You can connect with Jack on LinkedIn.

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