Person plugging in cable to a router

What’s the Difference Between a Modem and a Router?

Get Connected (to Your WiFi)

The difference between a modem and a router is simply that a modem connects you to the internet and a router connects a network of devices to WiFi.

Internet Service Providers (ISPs) rent modems to you as part of an internet package. They may also rent you a router or a combination modem and router. That is why it is so easy to get confused about what each one does and the difference between them.

When you understand what the difference between a modem vs router is, you will be able to make better decisions, such as knowing when to buy your own modem and stop paying a monthly fee to rent one.

What Does a Modem Do?

A modem is a hardware device that takes the signals that come from your ISP and translates them into an internet connection. It receives the information through the phone line, cable or optical fiber in your home and converts it into a digital signal.

A modem is like a bridge between the internet and your local network. It plugs into whatever type of infrastructure you have — telephone, cable or fiber — and you get a standard Ethernet cable output to plug into any router (or your single computer) to get an internet connection.

What Does a Router Do?

A router connects to the modem and creates a private network in an office or home. Your router and your ISP can’t communicate directly because they transmit different signal types. This is why the modem has to translate before the router can do its job.

The router pushes the signal from the modem out to the connected devices. When you connect to WiFi, you’re connecting to your router. This happens whether you’re using your smartphone, tablet, laptop or desktop computer. When you’re using your smart speakers, such as Amazon Echo, and other smart home systems, like security systems, the same process is taking place.

Wireless routers enable you to stream content without using any cables.

To the internet, all the traffic that comes from your home looks as though it is coming from a single device although you may have many different devices. Within your home or office, your router keeps track of what traffic goes to which device on your network.

Combined Modems and Routers

Some modems contain all the electronics and software to provide both functions. They act as a modem to communicate with your ISP and then work as a router to push the signal out to your home network. Some ISPs include a phone interface too so you can use their VoIP.

A disadvantage of a combination device is that you aren’t able to upgrade one device at a time and if one of the parts breaks, it affects the whole device. Using a combo is convenient if you aren’t too worried about having the latest technology.

Range Extenders

One wireless router may not be enough to cover your whole home or office if you have multiple floors and a difficult layout. You can buy range extenders that you connect to a router to expand its reach. Doing this usually means less bandwidth in areas near the extender, which means slower download and browsing speeds.

A Mesh Network

If you’re battling with range extenders and finding that browsing and downloading is slow, investing in a mesh network may be worthwhile. A WiFi mesh network consists of a router and several nodes.

The nodes can relay the wireless signal to one another without losing any bandwidth. The signal is as powerful after being relayed through these nodes as it is near the primary router.

Buying or Renting Modems and Routers

Modems are different for each type of service and they are not interchangeable. You have to have the correct type of modem that will work with your ISP's infrastructure. ISPs rent modems to subscribers for a monthly fee, but cable modems are for sale at fairly low prices.

Over the course of a year, the monthly fee charged by ISPs can add up to more than what it would cost to buy your own modem. Rather than renting a modem, you can buy your own modem, hook it up and return the rented one to your ISP.

Yes, it will cost you money upfront but the cost will probably add up to less than a year of monthly device rental fees. Keep the device longer than that and you can save money every month.

Check to see how much you are being charged monthly for modem rental and then check how much it would cost to buy the best modem for your ISP. If you’re spending $10 a month on modem rental, and buying one costs you about $80, it would take only eight months to break even.

Of course, if you have a combined modem/router unit, you will not have to buy a modem and a router.

Some ISPs will offer routers for rental. However, the router would probably not have the latest technologies, such as 5GHz WiFi. Buying a router enables you to get the latest technology and you can choose one that suits your home or office. If you’re a gamer, for example, you may want a router with advanced features.

Final Words

Knowing the difference between a modem and a router gives you more understanding as a consumer. Your modem has to function with your ISP's infrastructure because it receives information from the ISP and converts it into a digital signal.

Your router can’t communicate directly with your ISP because they transmit different types of signals. The modem is like the bridge between the two. When you’re connecting to WiFi, you’re connecting to your router which receives the digital signal from your modem.

You do not have to use the modem rented to you by your ISP. As long as you buy one that functions with your ISP's infrastructure, you can save yourself hundreds of dollars over the life of your modem.