Router vs Modem: What's the Difference?

The Quick Version

• Modem

  Modem

  A device that connects your home to the internet. It translates signals from your ISP (like NBN) into something your home network can use.

  Full definition → = Connects to the internet (one plug goes to the NBN

  NBN

  National Broadband Network

  Australia's government-built wholesale internet network. NBN Co builds the infrastructure, then internet providers buy access to sell you a connection.

  Full definition → or wall socket)
• Router

  Router

  A device that creates your home WiFi network and shares your internet connection with multiple devices. Also provides security by acting as a firewall.

  Full definition → = Creates your WiFi network and shares the connection with devices
• Modem-Router

  Modem-Router

  A single device that combines both modem and router functions. Also called a gateway or home hub. Most ISP-supplied equipment is a modem-router combo.

  Full definition → (Gateway) = One device that does both jobs

What Does a Modem Do?

A modem (short for modulator-demodulator) translates signals from your internet service provider into something your home network can use.

For NBN connections:

• FTTP

  FTTP

  Fibre to the Premises

  The fastest NBN technology — fibre optic cable runs directly to your home. Capable of speeds up to 2000 Mbps or more.

  Full definition → : The NBN box on your wall is essentially the modem
• FTTN

  FTTN

  Fibre to the Node

  NBN technology where fibre runs to a street cabinet, then old copper to your home. Speed varies based on distance from the node.

  Full definition → /FTTC

  FTTC

  Fibre to the Curb

  NBN technology where fibre runs to a small pit near your home, then short copper run inside. Better than FTTN but not as fast as FTTP.

  Full definition → /HFC

  HFC

  Hybrid Fibre Coaxial

  NBN technology using the old Foxtel/Telstra cable TV network. Fibre to your street, then coaxial cable to your home. Capable of gigabit speeds.

  Full definition → : You need a modem to connect to the NBN
• Fixed Wireless

  Fixed Wireless

  NBN technology that uses radio signals from a transmission tower to an antenna on your roof. Available in rural and outer suburban areas. Speeds up to 100-400 Mbps.

  Full definition → : The outdoor antenna connects to an indoor modem

The modem has one job: get the internet signal into your home. It usually has a single ethernet port that outputs to your router.

What Does a Router Do?

A router does several important jobs:

1. Creates your WiFi network - The wireless signal your devices connect to
2. Shares the internet - Takes one internet connection and shares it with many devices
3. Assigns IP addresses

   IP addresses

   Unique numerical addresses that identify each device on a network. Your router assigns local IP addresses (like 192.168.1.x) to devices in your home.

   Full definition → - Gives each device a unique address via DHCP

   DHCP

   Dynamic Host Configuration Protocol

   A system that automatically assigns IP addresses to devices when they connect to your network. Your router usually handles this automatically.

   Full definition →
4. Provides security - Acts as a firewall between your devices and the internet
5. Manages traffic - Directs data to the right devices

The router is what you interact with most - it’s where your WiFi name and password are set.

The Combined Device: Modem-Router

Most Australians have a single device that combines both functions. Your ISP

ISP

Internet Service Provider

The company you pay for internet access — like Telstra, Aussie Broadband, or TPG. They provide the connection to your home.

Full definition → probably gave you one when you signed up - it’s often called a “gateway” or “home hub.”

Common examples:

• Telstra Smart Modem
• TPG-provided routers
• Aussie Broadband supplied devices
• iiNet Hub

Pros of combined devices:

• Simpler setup - one device to manage
• Takes up less space
• Usually included by your ISP

Cons of combined devices:

• Often lower quality than dedicated routers
• If one part fails, both are affected
• Less flexibility for upgrades

Should You Use Separate Devices?

For most homes, the ISP-provided modem-router is fine. Consider separate devices if:

• You want a higher-quality router for better WiFi
• You’re having performance issues with the provided equipment
• You want more advanced features (QoS

  QoS

  Quality of Service

  A router feature that prioritises certain types of traffic (like video calls or gaming) over others. Helps ensure important activities get enough bandwidth.

  Full definition → , VPN

  VPN

  Virtual Private Network

  An encrypted tunnel that protects your internet traffic and can make it appear you're browsing from another location. Often used for privacy or accessing geo-blocked content.

  Full definition → , parental controls)
• You have a large home or many devices

With NBN FTTP, you can often skip the modem entirely and connect a router directly to the NBN box.

What About Mesh Systems?

Mesh WiFi

Mesh WiFi

A system of multiple WiFi units (nodes) that work together as one seamless network. Unlike extenders, mesh systems use one network name and automatically hand off devices as you move.

Full definition → systems (like Google Nest WiFi or TP-Link Deco) are essentially multiple routers that work together. They usually:

• Replace your ISP router
• Still need your modem or NBN connection
• Create one seamless network across your home

Some mesh systems include a built-in modem, but most don’t - check before buying.

Quick Identification Guide

If it has…	It’s probably a…
Coaxial port (cable connection)	Modem or modem-router
Phone line port + ethernet	ADSL/VDSL modem-router
Just ethernet ports + WiFi	Router only
NBN label and wall-mounted	NBN Connection Box
Multiple matching units	Mesh WiFi system

Official Resources

• NBN Equipment Guide - Understand NBN connection equipment
• NBN Address Checker - Find out what equipment you need for your connection type