This tutorial will show you how to configure PPP using Cisco SDM in order to enable communication between two routers connected through a serial link. This tutorial includes how to enable PPP encapsulation, and configure CHAP authentication. This article is designed for CCNA students, network engineers, and anyone looking to configure PPP using Cisco SDM (Cisco SDM is part of the CCNA syllabus).
The Point-to-Point Protocol (PPP) provides a standard method for transporting multi-protocol datagrams between two peers. PPP is comprised of three main components:
Follow these steps in order to configure PPP on a serial interface using Cisco SDM:
Step 1: Open Cisco SDM.
Step 2: Click Configure.
Step 3: In the tasks bar, click Interfaces and Connections.
Step 4: Select the Serial (PPP, HDLC, or Frame Relay) option, and then click Create New Connection.
Step 5: Click Next.
Step 6: In the Available Interfaces drop-down list, select the interface to configure, and then click Next.
Step 7: Choose PPP as the encapsulation type, and click Next.
Step 8: Enter the IP address and the subnet mask for your serial interface, and then click Next.
Step 9: Choose Default Static Route if you want to make the Router on the other end of the PPP link your default gateway. If not, simply click Next.
Step 10: Click Finish, and then click OK.
The following video will show the exact steps to configure PPP on R1. We assume that PPP is already configured on R2’s Serial 1/0 interface.

This video supposes that the routers R1 and R2 are configured according the network diagram above and R1 is allowing Cisco SDM to manage its configuration.
This video is based on the Cisco 3725 router with Cisco IOS software 12.4, and Cisco SDM version 2.5.
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