Frame Relay is a multiplexing technique that transmits only one frame at a time. Multiple virtual circuits can be used on a single physical line. The Frame Relay Access Device (FRAD), or router connected to the Frame Relay network, may have multiple virtual circuits linking it to different endpoints.
Multiple VCs on a single physical line is distinguished because each Virtual Circuit has its own DLCI. I have mentioned in the previous article that the DLCI has local significance and may be different at each end of a VC.
Multiple Virtual Circuits reduces the number of equipment and network also reduces the network complexity. Using Multiple Virtual Circuits makes the network very cost-effective. With this configuration, each endpoint required a single access line and a single interface.
The figure-1 below illustrates the example of Multiple Virtual Circuits of the central office with its remote locations. Central Office is connected to the network using two VCs and each VC is assigned a DLCI.
As I mentioned earlier that Frame Relay decreases the network cost because customers only pay for the bandwidth they use and for the port they are using. When the customer needs more ports, they pay for more bandwidth, but they do not pay for equipment because all the ports in Frame Relay are virtual.