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What’s the difference between a modem and a router?

Taylor Gadsden
TG
Taylor Gadsden

Nov 14, 2020 — 5 min read

Unsure about the difference between a modem and a router? Find out what each does and how they help you save money on your internet bill.

The difference between a modem and a router is simple: a modem connects you to the internet, and a router provides the Wi-Fi connection throughout your home. 

Knowing more about how your modem and router work and interact with your internet-capable devices can save you money, time and frustration. We break down these crucial components so you can decide what you need to get the most out of your home internet connection.

Modem vs. router: Main differences

Before Wi-Fi was a thing, most homes only had one desktop computer (if any!), and the only device you needed to connect your computer to the internet was a modem. Around 2001, Wi-Fi exploded in popularity, causing the number of Wi-Fi devices per home to skyrocket and the addition of a home wireless router to be indispensable. 

  • What does a modem do?

    • Your modem is your home’s connection to the internet. 
    • A 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 a unique IP address, similar to a Social Security number, that can identify the device on the World Wide Web.
    • Most internet providers either lease modems and routers for a monthly payment or offer a one-time purchase option.

  • What does a router do?

    • Your router is the middleman between your modem and your internet-connected devices, such as laptops, smartphones and smart TVs. 
    • A router creates a local area network (LAN) around your house which allows multiple devices to connect to your Wi-Fi connection.
    • A router connects all of your devices to your Wi-Fi network, but cannot connect to the internet without a modem. 



  • What is a gateway 2-in-1 device (a modem and router combo)?

    • A gateway is a router/modem combo, also called a wireless gateway.
    • In the past, routers and modems have come as two separate devices that work in tandem, but now, it’s more common to see gateways. 
    • A gateway replaces the need for two separate devices. It simplifies setup and takes up less space. Many internet service providers (ISPs) offer these 2-in-1 options for rent or purchase.
    • Gateways can be a more convenient option as they take up less space and have a simpler setup than standalone modems and routers.


Difference between a modem and router

What is a modem used for?

A modem transmits, receives and converts data. Whether you use DSL, cable, fiber or satellite internet, a modem is a device that translates signals from its digital or analog form to what you see on your screen. In other words, a modem gets the internet to your devices. A modem can function independently from a router. 

What is a router used for? 

A router distributes the Wi-Fi signal throughout an area, thus creating a wireless network. A router cannot work without a modem. Though these two devices can look similar, a router will often have external antennas and multiple Ethernet ports.

Think of it this way — a modem is like the engine in your car. Without it, your car would not run. But the router is like a fuel pump because it gets the gasoline (i.e. the internet) where it needs to go.

Netgear CM400 cable modem

modem

Netgear Nighthawk C7800 cable gateway

router

Modem vs. router vs. gateway

 A modem can function independently from a router, but a router cannot work without a modem. When a modem and router are built together as one device, that is called a gateway.

Learn more: The ultimate internet router guide

Modem and router setup: DSL, cable, satellite and fiber internet 

Modem and router setup can vary based on your internet type. Some types of internet service allow more freedom in selecting modems and routers, while others, like fiber internet, are more complex in their requirements. 

DSL

DSL internet provides internet access through your existing telephone lines and a modem, making it one of the most accessible internet types. 

DSL requires a DSL modem, which your ISP can provide. While a router is not required, it ensures your other devices can wirelessly connect to your network. To set up your DSL modem, plug it into a phone jack to connect it to your existing phone lines. To set up your router, connect it to your DSL modem with the required Ethernet cables. 

Cable

Cable internet uses the same technology as your cable television, but you will need a cable-compatible modem. If you want Wi-Fi, connect your modem to a router of your choice. Many providers also offer an option to purchase a gateway instead of a standalone modem and router. 

Fiber

Fiber optic internet is the best type of internet you can get in terms of speed but the setup is more complex than DSL and cable internet. 

You won’t need a different or specialized router if you have a fiber connection in your home, but you will need a high-performing router to take advantage of the faster connection fiber provides. 

Satellite 

Satellite internet cannot support the high speeds of cable and fiber internet, but it is available almost everywhere in the U.S. 

Satellite internet requires a home satellite dish installation and a satellite-compatible modem. You can choose whatever router that’s best for you, making it a flexible option for those located where other internet options are not available. 

What is a mesh network?

A mesh network is a type of LAN that uses more than one router to extend your Wi-Fi beyond standard bounds. These additional routers, also called nodes, are smaller than a typical router and cannot function without being connected to the primary router in your home. 

How can a mesh network help you? A mesh network can strengthen your Wi-Fi connection and give you greater connectivity overall, which can be especially useful when working from home. 

Learn more about modems, routers and getting faster internet speeds in this four-minute CNET video!

Should I rent or buy a modem and router?

Nowadays, ISPs 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, such as specific technical support and equipment upgrades. 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 vs. buying a modem and router.

Renting a modem and router

Pros to renting equipment:

  • Repair and software updates included
  • Guaranteed provider compatibility
  • Technical support on hand

Cons to renting equipment:

  • Use includes monthly rental payment
  • Payment solely goes toward usage

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 to buying equipment:

  • One-time purchase
  • Purchase is a long-term investment
  • Decreased annual internet bill
  • Customer gets to pick their own equipment

Cons to buying equipment:

  • Upfront cost of around $100
  • Must install equipment yourself
  • Repair, tech support and equipment updates are contingent on your warranty (not your ISP)

Now that you know the difference between a modem and a router, learn more about the internet equipment in your home and the best Wi-Fi routers available today.

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Taylor Gadsden

Written by:

Taylor Gadsden

Writer, Broadband Content

Taylor is a veteran member of the Allconnect content team and has spearheaded a number of projects, including a data piece on the top fiber cities in the U.S. and a troubleshooting guide on how to connect your p… Read more

Trey Paul

Edited by:

Trey Paul

Editor, Broadband Content

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