Most network operators have considered reducing LSR label spaces (number of labels used) as a way of simplifying management of underlaying virtual private networks (VPNs) and therefore reducing operational expenditure (OPEX). The IETF outlined the label merging feature in MPLS-allowing the configuration of multipoint-to-point connections (MP2P)-as a means of reducing label space in LSRs. We found two main drawbacks in this label space reduction scheme: a) it should be separately applied to a set of LSPs with the same egress LSR-which decreases the options for better reductions, and b) LSRs close to the edge of the network experience a greater label space reduction than those close to the core. The later implies that MP2P connections reduce the number of labels asymmetrically.
Solano, F., Stidsen, T. K., Fabregat, R., & Marzo, J. L. (2008). Label Space Reduction in MPLS Networks: How Much Can A Single Stacked Label Do? I E E E - A C M Transactions on Networking, 16(6), 1308-1320. https://doi.org/10.1109/TNET.2007.912382