Advantages & Disadvantages of a Leased Line

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Leased lines can secure your data tranmissions, but there are challenges.
Leased lines can secure your data tranmissions, but there are challenges. (Image: Ingram Publishing/Ingram Publishing/Getty Images)

A leased line is a dedicated telecommunication line that handles data and voice a company rents from a phone service provider. Companies commonly use leased lines as high-speed Internet connections, or as a dedicated phone line between two locations. Before investing in a leased line, you should become familiar with some of its advantages and disadvantages.

Security

A leased line is also referred to as a dedicated line, because it is dedicated to the two locations it is connecting. Data and information are transmitted without the use of the Internet. This makes the connection secure, and files sent over the connection are safe from hackers.

Access

A dedicated line offers bandwidth speeds of up to 1.544 Mbps for a standard T1 leased line. But unlike a DSL or cable modem Internet connection from your home, you are able to control how the bandwidth is distributed on a dedicated line, because you and your recipient are the only locations using the line. That means larger files get the bandwidth they need to travel quickly from location to location.

Cost

As of the date of publication, the typical cost of a T1 leased line in the United States was anywhere from $200 to $1,200 a month or more. Factors affecting the price include how much bandwidth you need on your line, service availability in your area and whether you want voice capability in addition to data transmission. There is also an additional charge of approximately $600 per line for set-up. If you have multiple locations that need dedicated leased lines, the cost can become extremely high. Using the Internet can be much less secure, but it also can be less expensive.

Delay

When you order a leased line, the provider has to arrange an installation of the dedicated line between the two locations. It is a process that can take weeks, and sometimes even months, to complete. If you want to send confidential and important information between two locations while waiting for a leased line to be installed, you can risk using the Internet or develop a way of sending removable media such as CDs back and forth.

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