This paper presents a procedure for Multi-Protocol Label Switching (MPLS) network dimensioning that deals with both the determination of the transmission facilities to be put in operation between routing sites and the determination of routing equipment that must be installed in each routing site. The dimensioning procedure aims to find the least cost physical network. The proposed approach considers two types of costs: O&M (operation and maintenance) costs and upgrade costs. The lifetime of an operator’s network is seen as being composed by consecutive cycles, where the network must be dimensioned for the traffic forecast of the next cycle. In each dimensioning step, the operator has two objectives. First, it wants to minimise the O&M cost of the required network and second, it wants to minimise the cost of the required node equipment upgrade. This approach results in two steps, each one given by an optimisation problem. The first problem determines the transmission facilities required between network nodes. The second problem determines the routing equipment that must be installed in each node. In the second step problem, upgrade costs include the acquisition costs of buying new equipment, transfer costs of moving existing equipment from one node to another, and storage costs when equipment that is in operation in the present cycle is not used in the next cycle.