The terms ‘modem’ and ‘router’ are often used interchangeably, but the two devices aren’t the same. So, what is the difference between a modem and a router, and do you really need both?
In this article Canstar Blue explains the differences between modems and routers.
Jump to:
- What’s the difference between a modem and a router?
- What is a modem?
- What is a router?
- How do modem-routers work?
- Is my modem compatible with my internet service provider?
- Internet plans with included modem-routers
Modem vs router: What’s the difference?
A modem connects a home to the internet, while a router allows devices within a home to access that connection, via a cable or, more commonly, via WiFi. Note that modems and routers are separate from NBN boxes, as used for FTTP, FTTC and HFC connections.
Although the words ‘router’ and ‘modem’ are often used interchangeably, each device serves a distinct function. However, most homes now use hybrid modem-routers. This means that you simply need to plug and play with one unit, rather than fiddling with two devices.
You can buy a modem-router hybrid separately from your internet plan and use it on a BYO basis, or add a compatible device to your broadband service at signup.
Compare NBN providers and plans
Thinking about a new NBN provider or plan to go alongside your new modem, router or modem-router? Check out some of the providers and plans available in the table below. The table contains affiliate links.
The following table shows a selection of sponsored unlimited data Standard Plus Evening Speed (NBN 50), and Premium Evening Speed (NBN 100) plans on Canstar Blue’s database with links to referral partners..
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1 Month Contract (1 month min. cost $63.90) Typical evening speed of 50Mbps
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Unlimited Data/month |
$63.90 Cost/month |
Go to Site |
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1 Month Contract (1 month min. cost $65) Typical evening speed of 50Mbps
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Unlimited Data/month |
$65 Cost/month |
Go to Site |
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1 Month Contract (1 month min. cost $69) Typical evening speed of 98Mbps
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Unlimited Data/month |
$69 Cost/month |
Go to Site |
Unlimited Home Standard (NBN 50) Plans
The following table shows a selection of published unlimited NBN 50 plans on Canstar Blue’s database, listed in order of standard monthly cost (excluding discounts), from the lowest to highest, and then by alphabetical order of provider. Use our comparison tool above to see plans from a range of other providers. This is a selection of products with links to referral partners.
Unlimited Home Fast (NBN 100) Plans
The table below shows a selection of published unlimited NBN 100 plans on Canstar Blue’s database, listed in order of monthly cost, from the lowest to highest, and then by alphabetical order of provider. Use our comparison tool to see plans from a range of other providers. This is a selection of products with links to referral partners.
What is a modem?
A modem is a device that links your home to your internet service provider (ISP). In the early days of the internet, when most people connected to the internet via the copper phone system, dial-up modems prevailed, before the advent of faster ADSL and VDSL technology and modems.
However, now the three most common types of modem connections in homes are:
- Fibre: As used to connect to the NBN.
- Wireless: For use with 4G and 5G broadband plans.
- Satellite: If you rely on services such as NBN Satellite or Starlink.
Pros and cons of modems
Pros of modems
- Essential for internet access: Provides the crucial connection to your ISP for online access.
- Flexibility: Compatible with various ISPs and network setups.
- Dedicated functionality: Ensures reliable data transmission between your ISP and home network.
Cons of modems
- Single function: Only provides internet access, requiring an additional router for a complete network.
- Initial cost: Buying a standalone modem can be more expensive than renting from an ISP.
- Compatibility issues: Not all modems work with every ISP or network type.
How much does a modem cost?
Modems typically cost between $100 and $300. However, high-end models can be over $700. Standalone modems are generally cheaper than modem-routers, but they’re more technical, and you’ll likely end up spending a similar amount on a router.
What is a router?
Routers connect the devices in your home to the internet. They can also allow your smart tech devices to communicate with each other. There are two types of connection:
- Wireless connection, via WiFi.
- Wired connection, using an Ethernet cable.
While WiFi is perfectly adequate for most home internet usage, wired connections can provide faster speeds and less latency, or data-transfer lag, which is optimum for serious online gaming.
Pros and cons of routers
Pros of routers
- Added security: Routers act as a firewall between your devices and the internet, due to password protection.
- Child safeguards: Some routers come with parental control settings, which can be used to control and limit a child’s internet access.
- Virtual Private Network (VPN) compatible: Allows you to connect to VPNs.
Cons of routers
- Internet connectivity: Cannot connect directly to the internet.
- Distance sensitivity: WiFi can be distance-sensitive, meaning the signal may get weaker based on proximity to the router.
How much does a router cost?
Routers typically cost between $200 and $1000, depending on the type of router, its features and if it’s a standalone router or a modem-router hybrid.
As we mention above, it’s quite uncommon to find anyone using a separate modem and router to connect to the internet, as most devices are hybrid modem-routers, meaning they do two jobs in one.
How does a modem-router work?
Sometimes referred to as a ‘gateway’, a modem-router combines the functions of a modem and a router, connecting the devices on your home’s local area network (LAN) to the internet.
Is my modem compatible with my internet service provider?
To find out if your modem is compatible with your internet service provider, check the modem’s specifications and consult your ISP. Most ISPs list compatible modems on their websites, or you can ask customer support for help. When choosing a modem, make sure it supports the necessary internet speeds and features you require, such as VoIP phone calls and parental controls.
Compare internet plans with included modem-routers
If you’re looking for a new provider and a new modem-router, many providers include a device on their broadband plans, often at no extra charge. Below you’ll find a selection of plans with modem routers bundled in.
Unlimited Premium Evening Speed (NBN 100) Plans
The following table shows a selection of published unlimited Premium Evening Speed (NBN 100) plans on Canstar Blue’s database, listed in order of standard monthly cost, from the lowest to highest, and then by alphabetical order of provider. Use our comparison tool above to see plans from a range of other providers. This is a selection of products with links to a referral partner.
Unlimited Standard Plus Evening Speed (NBN 50) Plans
The following table shows a selection of published unlimited Standard Plus Evening Speed (NBN 50) plans on Canstar Blue’s database, listed in order of standard monthly cost, from the lowest to highest, and then by alphabetical order of provider. Use our comparison tool above to see plans from a range of other providers. This is a selection of products with links to a referral partner.
Unlimited Standard Evening Speed (NBN 25) Plans
The following table shows a selection of published unlimited Standard Evening Speed (NBN 25) plans on Canstar Blue’s database, listed in order of standard monthly cost, from the lowest to highest, and then by alphabetical order of provider. Use our comparison tool above to see plans from a range of other providers. This is a selection of products with links to a referral partner.
Modem vs router: Which should I choose?
If you ask an electronics retailer for a modem or a router, they will probably refer you to the same device, as the terms are often used interchangeably, and most consumer devices combine both functions into one package.
It’s also worth noting that if you do opt for a standalone modem, you will require a separate router to create a WiFi home network.
Choosing a broadband plan that includes a combined modem-router can simplify the setup process. However, if you’re a discerning buyer, choosing your own equipment might be your best option. Remember: routers distribute the WiFi network throughout your home, while modems connect you directly to the internet.
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