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Discover the difference between a modem and a router

Taylor Gadsden

May 24, 2020 — 4 min read

Unsure about this gear? We’re here to help. Find out what this equipment does and how you can save money on your internet bill.

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On a surface level, the difference between a modem and a router is simple: a modem connects you to the internet, and a router provides the Wi-Fi, or wireless 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.

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What is the difference between a modem and a router?

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. 

Learn more: What’s the difference between Wi-Fi and internet?

What does a modem do?

Your modem is your home’s connection 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 a unique IP address, similar to a social security number, that can identify the device on the World Wide Web.

Term to know: IP address — An IP address is an identifying number for your network that lets the web know where to send information. Or, put another way, if you didn’t have an IP address, it would be like having a home without a mailing address.

What does a router do?

Your router acts as 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.

Term to know: LAN — Think of a LAN as an invisible “bubble” around your home in which your Wi-Fi signal lives. Without a router, you would not be able to have a Wi-Fi connection and would have to plug each device directly into a modem using an Ethernet cable. 

What is a gateway 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, also called a gateway or wireless gateway, has become commonplace in the industry. A gateway replaces the need for two separate devices thereby simplifying set-up and taking up less space in your home. Many internet service providers (ISPs) offer these 2-in-1 options for rent or purchase with your monthly internet service.

Term to know: Gateway — A device that performs all the functions of both a modem and a wireless router.

Modem vs. router: Which is better?

Technically speaking, a modem is fundamentally more important than a router because you wouldn’t be able to connect to the internet without one. However, as consumers collectively move away from standard computers and rely more on handheld devices, such as smartphones and tablets, having Wi-Fi can seem as crucial as water

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 the 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 is used to distribute 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.

Learn more: The ultimate internet router guide

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

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:

  • Repair, tech support and equipment updates are contingent on your warranty

Now that you know the difference between a modem and a router, learn more about the internet equipment in your home and whether you should invest!

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