Raja, the MVPN concept in L3VPN needs the SP backbone to be multicast enabled in contrast to L2VPN, where the multicst traffic is switched as any other traffic.
For idea behind MVPN in MPLS is to encapsulate VPN multicast packets into a multicast GRE tunnel which connects all the PE's where this VRF termiates. (this is controlled by the Default MDT configuration).
So essentially you build a backbone within a backbone for your end customer.
When the backbone is in place via default MDT, to enhance traffic forwarding to only intrested receivers and not to all end points, data MDT is put in place which forwards traffic between a source and intrested destinations. (this can be configured to trigger when a certain data threshold is crossed using the default MDT path for multicast traffic)
Here is a neat white paper with illustrations for reference.
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