Managed MPLS Market Size, Share, Growth & Industry Analysis, By Type (Level 2 VPN and Level 3 VPN), By Application (Healthcare, BFSI, Retail, Manufacturing, Government, IT & Telecommunication, and Others), and Regional Analysis, 2024-2031

Managed MPLS Market Size

Global Managed MPLS Market size was recorded at USD 60.12 billion in 2023, which is estimated to be at USD 62.71 billion in 2024 and projected to reach USD 93.18 billion by 2031, growing at a CAGR of 5.82% from 2024 to 2031. In the scope of work, the report includes solutions offered by companies such as amatis Networks, AT&T Intellectual Property., BT Global Services Ltd, CenturyLink, Inc., Cisco Systems, Inc., NTT Global Networks, Orange Business, Syringa Networks, Verizon, Vodafone Limited. and others.

The increasing demand for reliable and secure network connectivity, coupled with the rise of remote work and the proliferation of IoT devices, is driving the growth of the market. The growth of the managed MPLS (Multiprotocol Label Switching) market is due to the rising demand for reliable and high-performance network connectivity among enterprises.

Businesses require robust data transmission solutions to support cloud computing, VoIP, and other bandwidth-intensive applications. Additionally, the rise of remote working and the need for secure, efficient data communication solutions are significant factors supporting this growth.

• According to a 2023 report by Owl Labs, based on the increasing prevalence of remote work, approximately 62% of workers aged 22 to 65 worked remotely at least occasionally. This shift reflected a significant change in work culture, driven by advancements in technology and the adoption of flexible working arrangements post-pandemic.

The increasing adoption of IoT devices necessitates stable and scalable network infrastructure, thereby boosting the demand for managed MPLS services. Moreover, enterprises are increasingly outsourcing their network management to focus on core business functions, leveraging managed MPLS for enhanced operational efficiency and cost savings.

The managed MPLS market is characterized by its focus on providing secure and efficient data transport solutions tailored to enterprise needs. Managed MPLS services enable organizations to outsource their network management, ensuring reliable connectivity and optimized performance across multiple locations. The market is experiencing steady growth due to the rising demand for high-performance network services and the increasing complexity of enterprise network requirements.

Key market players, such as telecommunications companies, managed service providers, and network integrators, are competing to deliver comprehensive and scalable MPLS solutions to businesses across various industries.

Managed MPLS refers to a service wherein a third-party provider handles the design, implementation, and management of an enterprise's MPLS network. MPLS is a method used to direct data from one network node to the next, improving the efficiency and speed of data flow. Managed MPLS services offer businesses a method to outsource their networking needs, ensuring secure, reliable, and high-speed data transmission.

These services typically include network monitoring, maintenance, and optimization, allowing enterprises to focus on their core operations while benefitting from improved network performance and reduced infrastructure complexities. Managed MPLS is essential for organizations that require robust, scalable, and efficient network solutions.

Analyst’s Review

The managed MPLS market is witnessing significant initiatives by manufacturers to enhance service offerings and integrate advanced technologies. There is continuous investment in research and development by key players to introduce innovative products, such as SD-WAN integrated MPLS solutions, which provide enhanced network flexibility and performance.

• In September 2023, Adaptiv Networks partnered with Altaworx, LLC, aiming to expand their SD-WAN technology to include managed and self-managed services. This collaboration enhanced Adaptiv's capabilities in optimizing cloud-based voice and data services, catering to small businesses, enterprises with multiple sites, and remote workers. Altaworx's expertise in telecommunications complemented this offering, providing a comprehensive solution that integrated SD-WAN with UCaaS and mobility services.

There is an increasing focus on improving security features and offering scalable solutions tailored to diverse enterprise needs. To stay competitive, providers are increasingly adopting flexible pricing models and comprehensive support services.

Businesses should continue to evaluate these new offerings to leverage improved network efficiency and security. Utilizing managed MPLS with integrated SD-WAN is likely to help ensure optimal performance, cost savings, and scalability, thereby supporting the increasing demands of digital transformation.

Managed MPLS Market Growth Factors

The expansion of the market is propelled by the increasing demand for reliable and secure network connectivity. Businesses are continually expanding their digital operations, which require robust infrastructure to handle high data volumes and ensure seamless communication. Managed MPLS services provide the necessary bandwidth, security, and performance, making them essential for supporting cloud-based applications, video conferencing, and remote work environments.

This demand is further amplified by the proliferation of IoT devices, which necessitate stable and high-speed networks for optimal functionality. Managed MPLS services enables providers to maintain efficient and secure operations, catering to the evolving needs of modern digital landscapes.

A notable challenge in the managed MPLS market is the high initial setup cost and complexity associated with network deployment. This deters small and medium-sized enterprises (SMEs) from adopting these services. To overcome this challenge, service providers are offering flexible pricing models and scalable solutions tailored to the specific needs and budgets of SMEs.

Additionally, advancements in technology are simplifying the deployment process, reducing both time and cost. By providing comprehensive support and clear value propositions, managed MPLS providers are assisting SMEs in understanding the long-term benefits of these services, such as improved network performance and operational efficiency, leading to the widespread adoption.

Managed MPLS Market Trends

The integration of SD-WAN (Software-Defined Wide Area Network) technology is an ongoing trend in the managed MPLS market. SD-WAN is transforming network management for businesses by providing more flexibility, improved performance, and cost efficiency. Managed MPLS providers are increasingly incorporating SD-WAN into their service offerings to enhance network agility and reliability.

This integration allows enterprises to seamlessly combine multiple connection types, such as MPLS, broadband, and LTE, optimizing traffic flow and ensuring consistent application performance. The combination of SD-WAN and MPLS enables businesses to achieve better network visibility, simplified management, and enhanced security, making it a significant trend shaping the market landscape.

There growing emphasis on cybersecurity since cyber threats due to the increasing sophisticatication in cyber attacks. Due to this, businesses are increasingly prioritizing secure network solutions to protect sensitive data and maintain operational integrity. Managed MPLS providers are responding to this trend by incorporating advanced security features into their offerings, such as encrypted data transmission, robust firewalls, and continuous monitoring for potential threats.

Additionally, there is a major focus on compliance with industry standards and regulations to ensure data protection. By enhancing their security capabilities, managed MPLS providers are addressing the critical need for secure and reliable network services, which is influencing its adoption.

Segmentation Analysis

The global market is segmented based on type, application, and geography.

By Type

Based on type, the market is categorized into level 2 VPN and level 3 VPN. The level 3 VPN segment led the managed MPLS market in 2023, reaching a valuation of USD 33.80 billion. Level 3 VPNs, also known as Layer 3 VPNs, operate at the network layer, enabling seamless integration with various IP-based services and applications. This capability is crucial for businesses seeking efficient and secure data transfer across multiple locations.

The growing reliance on cloud-based applications and services is resulting in an increased demand for Level 3 VPNs, as they offer enhanced performance and security. Furthermore, enterprises prefer the ease of management and robust performance provided by Level 3 VPNs, thereby contributing to rising integration.

By Application

Based on application, the managed MPLS market is classified into healthcare, BFSI, retail, manufacturing, government, it & telecommunication, and others. The IT & telecommunication segment is poised to witness significant growth at a CAGR of 7.40% through the forecast period (2024-2031). This growth is attributed to the increasing demand for high-speed, reliable, and secure connectivity solutions within the sector. Rapid digital transformation is resulting in the expansion of the infrastructure of IT and telecommunication companies to support cloud computing, IoT, and data-intensive applications.

Managed MPLS services are becoming essential for these companies to ensure seamless network performance and data security. Additionally, the proliferation of remote work and the need for robust communication networks are stimulating the adoption of managed MPLS in the IT and telecommunication industry, thereby fostering the expansion of the segment.

Managed MPLS Market Regional Analysis

Based on region, the global market is classified into North America, Europe, Asia Pacific, MEA, and Latin America.

The North America managed MPLS market share stood at around 34.27% in 2023, with a valuation of USD 20.60 billion. This dominance is propelled by the region's advanced technological infrastructure and high adoption rates of innovative networking solutions. Enterprises in North America are increasingly reliant on secure and efficient network connectivity to support their digital operations, including cloud computing, IoT, and remote work.

Additionally, the presence of leading managed service providers and substantial investments in network modernization contribute to regional market growth. Regulatory frameworks and industry standards promoting data security and network reliability further increase the adoption of managed MPLS services in this region.

Asia-Pacific is poised to grow at a robust CAGR of 7.83% through the estimated timeframe. This rapid expansion is aided by the region's booming economies, increasing digitalization, and growing demand for reliable network connectivity. Countries such as China, India, and Japan are investing heavily in IT infrastructure and adopting advanced technologies, thereby fueling the need for managed MPLS services.

The proliferation of smartphones, IoT devices, and cloud-based applications is further boosting demand. Additionally, government initiatives supporting digital transformation and the expansion of telecommunications networks are supporting the growth of the Asia-Pacific managed MPLS market.

Competitive Landscape

The managed MPLS market repport will provide valuable insight with an emphasis on the fragmented nature of the industry. Prominent players are focusing on several key business strategies such as partnerships, mergers and acquisitions, product innovations, and joint ventures to expand their product portfolio and increase their market shares across different regions.

Manufacturers are adopting a range of strategic initiatives, including investments in R&D activities, the establishment of new manufacturing facilities, and supply chain optimization, to strengthen their market standing.

List of Key Companies in Managed MPLS Market

• amatis Networks
• AT&T Intellectual Property.
• BT Global Services Ltd
• CenturyLink, Inc.
• Cisco Systems, Inc.
• NTT Global Networks
• Orange Business
• Syringa Networks
• Verizon
• Vodafone Limited 

Key Industry Developments

• October 2023 (Launch): HFCL introduced its IP/MPLS Routers at the India Mobile Congress 2023. These routers, designed and developed in-house, tackled network connectivity and bandwidth challenges for telcos and enterprises. The launch highlighted HFCL's commitment to technological advancements. The routers aimed to support 5G backhaul, fiber broadband, and last-mile connectivity, meeting the demands of Industry 4.0 and enabling scalable and efficient networks with Quality of Service (QoS) capabilities.
• June 2023 (Partnership): Nokia was appointed by the Toulouse Metropolitan Area for the European HI5 project, which involved deploying a shared 5G and IP/MPLS private network. This covered an initial test area of around 16 square kms. This initiative aimed to enhance mobility and bolster public safety, support municipal services, and boost local enterprise competitiveness through innovation zones. Nokia implemented various use cases, including providing connectivity for public events, conducting real-time video analysis for community security, and offering 5G application training for students.

The global managed MPLS market is segmented as:

By Type

• Level 2 VPN
• Level 3 VPN

By Application

• Healthcare
• BFSI
• Retail
• Manufacturing
• Government
• IT & Telecommunication
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • U.K.
  • Spain
  • Germany
  • Italy
  • Russia
  • Rest of Europe
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Rest of Asia-Pacific
• Middle East & Africa
  • GCC
  • North Africa
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Argentina
  • Rest of Latin America