Modem vs Router: What’s the Difference?

Modem vs Router: What’s the Difference?

17 Sep 2021 | 8 min read

Quick Summary

A modem is a device that translates analogue signals into digital and vice versa. A router directs traffic through your network to specific devices.

What is a modem?

A modem is a device that connects your local network to the Internet. This connection is known as a wide area network, or WAN for short.

What is a modem’s function in a network?

In networking, a modem is a device that modulates and demodulates (hence the name mod + dem = modem) a signal between analogue and digital states. This is necessary because computers operate through binary electrical signals, which are digital in nature.

Successfully transporting a digital signal over long distances at high speeds is, at present, limited to a select few technologies (including fibre optic cable).

Even in these instances, the signal has to be converted into a digital signal that can be interpreted by your devices’ components.

For this reason, it’s necessary for circuits to be able to use both analogue and digital signals.

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Since analogue signals can be translated, or ‘modulated’, into analogue and back again, there are many more methods available to us when it comes to transporting data over long distances.

Examples of analogue signals:

  • The alternating current carried down a copper wire;
  • The variable frequencies of 4G and 5G radiofrequency (RF) signals.

Types of Modem

Depending on the type of signal being used to provide a connection, the modem will work slightly differently.

You’ll therefore need a specific type of modem depending on your type of internet connection.

DSL modems, 4G modems and fibre modems each deal with a different kind of signal.

  • DSL modems demodulate analogue signals coming through copper telephone lines.
  • Fibre modems convert binary flashes of light into a digital signal interpretable by your PC.
  • 4G modems have to be able to demodulate the alternating current created in the element of a 4G antenna when it interacts with the variable frequencies of a radio wave travelling through space.

Modem products

Most networking products containing a modem contain either (i) a mobile data modem (3G/4G/5G) for (de)modulating RF signals, (ii) a DSL modem, or (iii) a Fibre modem, which translates the flashes of light sent through fibre optic cable into electrical signals that a device’s logic board can understand.

Whilst it’s possible to purchase a standalone modem, though, it is actually rarer in the real world than using a combined router and modem - what is sometimes referred to as a ‘gateway’.

Gateway or separate modem and router?

Devices that combine the capabilities of both a router and a modem are sometimes called gateways. Depending on the manufacturer, though, you may find these marketed as ‘routers with integrated modems’.

Most modern networks will not benefit from separating out their modem and router.

Of course, this doesn’t mean that the typical ISP-provided hardware will suit the needs of a large business. Business-grade routers with an integrated modem are more than capable of meeting the needs of any modern business. Routers by the likes of DrayTek and Ubiquiti offer all the features discussed here.

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What is a router?

A router is a device that connects or 'routes' network traffic to your devices. The router creates a local area network (LAN) which enables multiple connected devices to communicate with each other. 

What is a router’s function in a network?

Whilst a modem serves as a kind of analogue/digital signal translator, converting signals from a format capable of travelling long distances into electrical signals that devices on your network can understand, a router literally directs these signals to the devices they’re intended for.

Those signals coming into your network from the wider world contain data. Some of that data acts as a label and is there to tell your router which device on the network is its destination.

Without a router, local networks could consist of only a single device. As it happens, if all you have is a single device, you can plug that device directly into your modem for a perfectly operable network.

Types of Routers - Built-in Modem

Most routers contain a built-in modem, meaning you won’t need a standalone modem as well as your router.

This makes understanding what kind of internet connection you have a prerequisite for choosing a router since the type of connection needs to be compatible with the integrated modem.

For businesses and homes, this will usually be ADSL/VDSL or fibre.

So how do you know what kind of connection you have?

If your internet comes through a phone line, or if your maximum speeds are below 100Mbps, you probably have ADSL/VDSL.

You can always check the details of your contract with your ISP to know for sure, or use a broadband availability checker to see what service is provided in your area.

If your connection is 4G/5G, you’ll know, because you will have had to do a lot of work setting up antennas, buying data plans and SIM cards in order to set up that mobile broadband connection.

Types of Routers - Features

Routers are available with various features, depending on the needs of the user.

Businesses often need far more control over their internal network, with greater security concerns and responsibilities than consumers.

These include protecting intellectual property, protecting staff and customer data and, for SaaS businesses, ensuring maximum service uptime.


As a result of these concerns and responsibilities, businesses have sought out routers that offer features like multi-WAN, which allows you to load-balance your network.

In practice, a load-balanced network is one where, if one WAN connection goes down, others remain active, meaning the business’ service remains online too.


For internal security, segregating certain parts of the network can be useful - for example, to offer limited functionality to guests. This can be achieved virtually through the use of VLANs - virtual local area networks.

Firewalls and Content Filtering

Firewalls and Content Filtering controls are also useful features only available on certain router models.

These are used to block certain types of content (social media, for example), on your networks - useful for business leaders looking to improve staff productivity.

With the aforementioned VLANs, such content can remain available to those on the Guest network, though bandwidth for these users might be limited to give precedence to staff doing work critical to the business.

Throughput Speeds

Business-grade routers will offer much higher throughput speeds than consumer routers, with each LAN port often offering upwards of 1Gbps throughput speeds, ensuring it won’t be your network router acting as the bottleneck in your network.

Consumer Routers

Consumer-grade routers will be cheaper than business routers and often incorporate other functions, like switching and wireless access. In exchange, they’ll be far less configurable, with none or fewer of the above features.

Draytek Vigor 2866 Business Router
The DrayTek Vigor 2866 is a business-grade routers with all of the features mentioned above.

Wireless Routers

Some models of routers also act as wireless access points or at least offer the ability to configure WLANs or wireless local area networks. When you ‘connect to the wifi’ in your home or office, you’re connecting to a WLAN. When you plug an ethernet cable directly into your PC, you’re connecting directly to the local network.

You don’t need a WiFi router to connect to WiFi, though. All you need is a wireless access point somewhere. It just so happens that many consumer-grade routers take on this role as well (albeit less effectively than standalone units built specifically for the purpose).

Even large multi-storey buildings need only a single router to handle all of their network traffic.

However, wireless connectivity needs to be supplied to every room of that multi-storey building.

For this, you’d need to use network switches to route network traffic throughout the building, then use wireless access points to broadcast WLANs for your devices to connect to.

For smaller spaces, like a one-bedroom flat, a wireless router might be all you need, since the single access point sits within range of all the devices in the space and there is only a small number of demanding users at any one time.

Therefore, a wireless router is usually best for home users or small offices that aren’t going to be running any bandwidth-heavy processes like video conferencing or hundreds of concurrent VoIP calls.

Large businesses and most SMBs will need a business router that gives them some level of granular control over their network. Even if you outsource the installation, setup and maintenance of your business router and business network to a managed service provider, you’ll be able to take charge of the way your business uses the internet.


Both a modem and a router are essential components of any network. Though it’s possible to purchase a router without an integrated modem, most businesses will not benefit from separating the two.

When choosing a router with an integrated modem, you first need to know what kind of internet connection you have. From there, it comes down to the features you need for your network such as throughput speeds, VLAN tagging, firewall rules and remote management.

If you’re looking to supply internet connectivity throughout a small space, you can consider a wireless router that also acts as a wireless access point.

Otherwise, you’ll also need to invest in wireless access points and network switches to push wireless connectivity throughout your office space or home.

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Modem vs Router: What’s the Difference?