The Difference Between a Modem And a Router Explained

Many internet users simply think of their modem and router devices as a means to an end. But what does this equipment do? What’s the actual difference between a modem and a router? We’re breaking down these crucial components of your home Wi-Fi connection because knowing more about your devices can also save you money.

What does the modem do?

Your modem is your home’s gateway to the internet. The modem receives signals from your internet service provider (AT&T, Cox, Spectrum, etc.) and translates them for your devices to use. Every modem is assigned an IP address, similar to a social security number, that can identify the device on the World Wide Web.

What does the router do?

Your router’s job is to act as the middle man between your modem and your internet-connected devices, including laptops, smartphones and smart TVs. An effective router will create a LAN, or local area network, around your house and allow multiple devices to connect to your very own Wi-Fi connection.

What is a 2-in-1 device?

In the past, routers and modems have come as two separate devices that work in tandem. More recently, a router/modem combo has become commonplace in the industry and works as a singular, multi-functional device. Providers often offer these 2-in-1 options as a way to simplify monthly costs and setup.

What is a mesh network?

Mesh networks use a “network” of smaller routers typically called nodes to extend your Wi-Fi beyond standard bounds. While the nodes pick up your Wi-Fi signal, the main node is connected to the modem. A mesh network can strengthen your Wi-Fi connection and give you greater connectivity overall.

Should I rent or buy my own modem and router?

Nowadays, internet service providers are eager to rent you their equipment, usually in the form of a 2-in-1 device for around $10/mo.* There are benefits to a provider equipment rental, but if you’re looking to save money, investing in your own equipment may be the way to go. Check out some pros and cons of renting a modem and router vs. buying your own.

Renting a modem and router

Pros	Cons
✓Repair and software updates included	X Use includes monthly rental payment
✓Guaranteed provider compatibility	X Payment solely goes toward usage
✓Technical support on hand

Whether or not you should invest in your own equipment depends on your living situation, your commitment to your current internet access plan and who you’ll be sharing the purchase with.

Buying a modem and router

Pros	Cons
✓One-time purchase	X Repair, tech support and equipment updates are contingent on your warranty
✓Purchase is a long-term investment
✓Decreased annual internet bill
✓Customer gets to pick their own equipment