The answer is that the BGP next-hop must be reachable via the IGP with an MPLS label. This condition is critical because for a PE router to install a VPNv4 prefix into its routing table, it must first resolve the BGP next-hop—typically the remote PE—through the IGP, and that IGP route must carry an MPLS label. The label ensures that a transport LSP exists to the next-hop, allowing the PE to build the correct label stack for forwarding VPN traffic across the MPLS core. On the Cisco SPCOR 350-501 exam, this concept tests your understanding of BGP next-hop resolution in MPLS L3VPNs, often appearing as a trap where candidates assume simple IGP reachability is enough, forgetting the mandatory MPLS label. A common memory tip is “No label, no install”—if the IGP route to the next-hop lacks an MPLS label, the VPNv4 prefix will not be installed, even if the next-hop is pingable.
350-501 Services Practice Question
This 350-501 practice question tests your understanding of services. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A service provider is deploying MPLS Layer 3 VPN and needs to ensure that BGP next-hop resolution works correctly for VPNv4 prefixes learned from a route reflector. The PE routers are directly connected to the RR via iBGP, and there is an IGP running within the MPLS core. Which condition must be met for the PE to install the VPNv4 prefix into its routing table?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The next-hop must be reachable via the IGP with an MPLS label.
For a PE router to install a VPNv4 prefix learned from a route reflector into its routing table, the BGP next-hop (typically the remote PE) must be reachable via the IGP with an associated MPLS label. This ensures that the transport LSP exists to forward traffic toward the next-hop, which is required for MPLS L3VPN operation. Without an MPLS label in the IGP for the next-hop, the PE cannot build the necessary label stack and will not install the VPNv4 route.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
The next-hop must be reachable via the IGP with an MPLS label.
Why this is correct
MPLS LSP must exist to the next-hop for label imposition.
Related concept
Read the scenario before looking for a memorised answer.
✗
The next-hop must be a directly connected interface.
Why it's wrong here
Direct connection is not a requirement; reachability via IGP is sufficient.
✗
The PE must have a VPN label for the next-hop.
Why it's wrong here
VPN label is for per-VRF forwarding, not next-hop resolution.
Common exam trap: answer the scenario, not the keyword
Cisco often tests the misconception that a directly connected next-hop or a VPN label for the next-hop is required, when in fact the critical condition is IGP reachability with an MPLS label for the BGP next-hop.
Detailed technical explanation
How to think about this question
Under the hood, BGP next-hop resolution for VPNv4 prefixes relies on the IGP (e.g., OSPF or IS-IS) to provide a recursive lookup that yields an outgoing interface and an MPLS label (from LDP or RSVP-TE). If the IGP route to the next-hop does not have an MPLS label, the PE cannot push the transport label, and the VPNv4 route remains in the BGP table but not in the IP routing table (RIB). In real-world deployments, this often causes issues when LDP is not enabled on all core interfaces or when next-hop self is not configured on route reflectors.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A network engineer at a university connects two campus buildings via a fibre link. Both routers run OSPF, but no adjacency forms — even though both routers can ping each other. The engineer finds one router is in area 0 and the other in area 1. OSPF adjacency requires matching area numbers, hello/dead timers, and network type. IP reachability alone is not enough.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Services — This question tests Services — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: The next-hop must be reachable via the IGP with an MPLS label. — For a PE router to install a VPNv4 prefix learned from a route reflector into its routing table, the BGP next-hop (typically the remote PE) must be reachable via the IGP with an associated MPLS label. This ensures that the transport LSP exists to forward traffic toward the next-hop, which is required for MPLS L3VPN operation. Without an MPLS label in the IGP for the next-hop, the PE cannot build the necessary label stack and will not install the VPNv4 route.
What should I do if I get this 350-501 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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