Modem vs Router

Modems and routers are both important for your home internet connection, but what do they do?

Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on August 5th, 2024       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

Internet Banner - Internet modem router sitting on a table while a woman uses her tablet in the background

You might’ve heard the terms ‘modem’ and ‘router’ before when it comes to internet plans, but you may not know the difference between them. While these two devices are essential for getting your home or office online, they serve distinct roles in the process.

In Savvy’s handy guide, we'll help demystify the modem vs router debate, explaining their functions, how they work and which one might be the right choice for your specific internet needs. Learn more about them right here with us today!

What are the differences between modems and routers?

Modems and routers are two distinct devices that serve critical roles in getting your internet plan up and running. Here's a breakdown of their differences:

Function

  • Modem: a modem is responsible for modulating and demodulating data signals. It's the gateway between your local network and your internet service provider (ISP). Modems translate the digital data from your devices into signals that can travel over your ISP's network and vice versa.
  • Router: a router, on the other hand, manages data traffic between devices within your local network. It acts as a central hub, directing data packets between your various devices and ensuring they reach their intended destinations efficiently.

Physical connection

  • Modem: modems typically have one or more ports for connecting to your ISP's network via a coaxial cable, fibre optic cable or other means. They don't usually have multiple ports for connecting multiple devices.
  • Router: routers have multiple ports and sometimes Wi-Fi capabilities for connecting several devices within your home or office network. They create a local area network (LAN) to facilitate communication among your devices.

IP address

  • Modem: modems often have a single public IP address assigned by your ISP. This IP address is visible on the internet and serves as the entry point for data to and from your network.
  • Router: routers assign local IP addresses to devices on your network. These private IP addresses enable devices to communicate with each other while sharing the modem's single public IP address to access the internet.

Security

  • Modem: modems typically don't provide robust security features. Their primary role is data translation and transmission.
  • Router: routers often include security features like firewalls and port forwarding to protect your local network from potential external threats.

In summary, modems and routers have distinct functions: modems connect you to your ISP and the internet, while routers manage data traffic within your local network. Both are essential for a complete and functional internet setup.

How do I find out if I need a modem or a router for my NBN connection?

Whether you need a modem or router (or both) will ultimately depend on the nature of your connection. For example, different NBN connection types require different configurations. These include:

  • Fibre to the Premises (FTTP): because your NBN connection box effectively acts as a modem itself, you’ll only need a router for your setup.
  • Fibre to the Node (FTTN): you’ll need a modem router for FTTN connections, which enables you to send and receive data as well as distribute it.
  • Fibre to the Curb (FTTC): like FTTP, you’ll likely only need a router to establish a FTTC connection for the NBN.
  • Fibre to the Building (FTTB): the requirements for FTTB connections are essentially the same as those for FTTN, meaning you’ll need a compatible modem router.
  • Hybrid Fibre Coaxial (HFC): HFC connections typically only require a router to hook you up to the internet at your home or office.
  • Fixed Wireless: you’ll need a router to connect you to the box provided by your ISP or NBN Co.
  • Satellite: like Fixed Wireless, a router will be enough to link to your satellite modem.

Will my NBN plan come with a router or modem included?

Almost all NBN plans come with either a modem, router or modem router included as part of the deal. This is sometimes offered for free, though this may be conditional on you remaining signed up to your plan for a certain period, such as 12 to 24 months.

However, in some cases, you may be able to use an existing modem or router from a previous plan, provided it’s compatible with your new provider and plan. If you’re charged for your modem, this may end up being a more cost-effective way to establish your new internet connection.

However, it’s important to note that some providers may charge activation fees if you BYO modem, so it’s important to consider which option is best for your needs and budget.

More common questions about modems vs routers

Is a modem or router better for me?

There isn’t one better option between the two, as both can be very important in establishing a connection at your home. However, if you were looking for a more convenient option, a modem router (modem with built-in routing capabilities) will likely require less setup than a separate modem and router.

Can I purchase an internet plan without a router?

If you wish to distribute your data connection to your various home devices, you’ll need a router. Whether this comes separately or as part of your modem will depend on your provider or the equipment you already have in your home.

Do I need a modem or router for a home wireless broadband plan?

In most cases, the modem provided with your home wireless broadband plan will also serve as a router, minimising the setup compared to some fixed line connections.

Helpful guides on internet plans

Internet Banner: Person sitting on a person's back while holding a tablet

HFC NBN Explained

Find out more about HFC connections on the NBN, how they work and their potential speeds. HFC is a unique...

Internet Banner: A man in glasses sitting at a desk with a laptop

5G vs NBN

Find out the differences between 5G and NBN internet connections, including their availability, cost, reliability and more. With both 5G...

Internet Banner - Senior couple looking at a tablet while sitting on the couch together

What NBN Speed Do I Need?

It’s crucial to know which NBN speed tiers are available so you can determine which is the best for your...

Internet Banner - Young couple sitting on the couch comparing internet plans on their tablet

How Much Does Internet Cost?

Find out the average cost of NBN plans and other factors which can impact your internet bills right here. Wondering...

Internet Banner - A woman sitting at a table with a laptop and mobile phone

What is an ISP?

ISPs are a crucial piece of the puzzle when it comes to connecting your home to the internet. Internet service...

Internet Banner - Worried young man looking at his phone

Why is My Internet So Slow?

Having a slow internet connection can be painful, so it’s important to understand why that might be and how to...

Internet Banner - Middle-aged couple sitting on the couch looking at a tablet

Alternatives to the NBN

There are several alternatives to the NBN if you’re looking elsewhere for internet for your home or office. As internet...

Internet Banner - Young woman sitting on the couch looking at a tablet

FTTB NBN Explained

Find out more about FTTB connections on the NBN, how they work and their potential speeds. If you live in...

Internet Banner - Internet modem router sitting on a table while a woman uses her tablet in the background

Modem vs Router

Modems and routers are both important for your home internet connection, but what do they do? You might’ve heard the...

Compare internet plans with Savvy

Regardless of whether you're looking for an internet plan for a one-person household or a large family, you can compare a range of offers from leading Australian providers side by side with Savvy. Get started with a free, no-obligation quote today!

Disclaimer:

Savvy is partnered with Econnex Comparison (CIMET Sales Pty Ltd, ABN 72 620 395 726) to provide readers with a variety of internet plans to compare. We do not compare all retailers in the market, or all plans offered by all retailers. Savvy earns a commission from Econnex each time a customer buys an internet plan via our website. We don’t arrange for products to be purchased directly, as all purchases are conducted via Econnex.

Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an internet plan. For further information on the variety of internet plans compared by Econnex, or how their business works, you can visit their website.