With MPLS, the carrier's router assigns a short tag to incoming packets. That means three big wins for networkers. The first win is better traffic engineering.
Carriers can manually force traffic down underutilized paths, which lowers costs and reduces prices.
The second win is better security. Routing based on labels completely segregates traffic from different companies creating VPNs. The third win is more bang for the buck through QoS. With MPLS on the backbone, carriers have the means to distribute and enforce QoS parameters across the service, an approach heavily backed by Cisco Systems. On the other hand, QoS also lets managers roll out such applications as SAP or Web-based call centers that may not have been suitable for conventional IP services. In short, these are just the industrial-strength IP services international network managers have been waiting for.