It used to be an absolute requirement to configure sparse-dense mode so that announce (224.0.1.39) and discovery (224.0.1.40) messages could be delivered in dense mode.
There is now a feature that allows you to run auto-rp in a network configured for sparse-mode only. It is called auto-rp listener. For more information, please refer to the following link:
http://www.cisco.com/en/US/products/sw/iosswrel/ps5187/products_command_reference_chapter09186a008017cf24.html#wp1068637
Hope this helps,
Harold Ritter
Sr Technical Leader
CCIE 4168 (R&S, SP)
harold@cisco.com
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