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Modem vs router: What’s the difference?

You might think the two terms describe the same thing, but modems and routers are actually different. Today, however, they’re often used so interchangeably that they almost do mean the same thing – that little box you access the Wi-Fi through, and in fact, most modems today are modem routers, a mix of the two. But what are the differences between modems and routers, and which is best for your home internet needs?

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What’s the difference between modems and routers?

Routers connect your devices around the home to each other, while your modem connects to the wider internet, allowing you to access websites like Google and Facebook. When you connect to Wi-Fi, you’re connecting to the router part of your box, which then forwards traffic through the modem component and the internet. These terms are often used interchangeably, but in reality, they are very different.

  • If you need Wi-Fi connection for multiple devices, a router with a built-in modem is what you’ll need. This is very commonplace in modem-routers, and likely what you use today.
  • If you have a modem-only device, it is usually wired and you’ll need to connect directly to it to access the internet. To get multiple devices connected, you’d need to buy a router and plug it into the modem.
  • Note that these devices are separate from your NBN connection box, seen in FTTP, FTTC and HFC connections.

Luckily, we’re not living in 2001 anymore; providers and retailers these days offer hybrid modem-routers. This means that you simply need to ‘plug and play’ without fiddling with two devices. You’ll only need to get into the back end of the one device through a setup portal. You can also buy these modem-router hybrids separately to couple with BYO plans. Setting up a modem is easy too.

Most devices on the market today may say they are a ‘modem’ or a ‘router’. However, the fact is the device you are purchasing probably includes both. Typically, if what you’re buying really is one or the other, it should specify this. If you want to be extra careful, look out for an ‘NBN ready’ sticker or badge on the box, just to be sure. Your current router might even be NBN ready.

NBN Providers & 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.

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 (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 Premium Evening Speed (NBN 100) Plans

The table below shows a selection of published unlimited Premium Evening Speed (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.

Modems – getting you online

Modems are devices that connect your home to the internet. Essentially, modems receive internet data through the wiring in your home (either through fibre wiring, copper wiring, signal towers or satellite signals in Australia) and translate internet data for use in your home (this data is then sent to your router). Think of it like a junction where the internet meets your home and sends data between the larger internet and your WiFi.

Modems connect via an ethernet cord or coaxial cable to your internet supplying wall socket, depending on the type of technology your home uses. Some NBN technologies (such as FTTP and HFC) use an additional box that then speaks to your modem and router. Modems then communicate with your router via an ethernet cord, unless you’re using a modem-router hybrid.

These days, standalone modems are more difficult to come by than modem-router hybrids, which you likely own. Having modems and routers as separate devices is an unnecessary hassle these days, so having them combined into a single device solves a lot of problems.

Modems Pros and Cons


Pros
  • Connects to an Internet Service Provider
  • No connection issues due to the cord providing a direct link from modem to device


Cons
  • Unable to run WiFi
  • Cannot sustain multiple devices
  • Cannot create a local network

How much do modems cost?

Modems can cost anything between $50 and $700, depending on the features you want included, the brand, and ultimately if you want it to be a modem-router or not. Of course standalone modems are generally cheaper than modem-routers, but they’re more technical, and you’ll end up spending an identical amount on a router anyway.

Routers – getting you wireless

A router is a device that transmits data throughout your home, through either wired (via ethernet) or wireless (via WiFi) connections. Routers are the local point in your home connection and connect to your computers, laptops, TVs, gaming consoles and phones, allowing them to access the internet.

Your router connects to the internet by speaking to your modem, which speaks to the internet. If you have both devices separate, the modem connects to your router through an ethernet cable, which is plugged into the WAN (Wide Area Network) port. If you’re using a modem-router hybrid, you simply subvert the role of the modem as a separate device, and plug the WAN ethernet cord into the connection box or your wall port, respective of what NBN technology your home is serviced by.

It’s quite uncommon that you’ll come across anyone using a separate modem and router internet connection, as most modems and routers sold by retailers these days are hybrid modem-routers, meaning they do two jobs in one. That being said it’s important to know the difference.

Routers Pros and Cons


Pros 
  • Runs WiFi
  • Runs a firewall for added security
  • Creates a local network
  • Can be used with several devices


Cons
  • Can’t connect directly to the internet 
  • WiFi can be distance-sensitive, meaning the signal may get weaker based on proximity to the router

How much do routers cost?

Routers will set you back typically between $50 and $700, depending on the type of router you get, the features it’s capable of, and ultimately if it’s a standalone router or a modem-router hybrid. Standalone routers are typically cheaper, although you’ll end up spending the same amount of money when you pick up a standalone modem.

How do modems-routers work?

Sometimes referred to as a ‘Gateway’ Modem-routers connect to your home internet connection type, which speaks to the rest of the world wide web. Often today, modem-routers are sold as hybrids, capable of both the role of the modem and the router, whereas in previous decades they would have been separate products.

LED lights on the modem, router or modem-router indicate the status of your home internet connection, including if the devices are being powered, if the router is transmitting data over LAN or WiFi, or if the modem is receiving data from the internet. Typically, these lights can help you find out why your internet is slow, but that often requires some deeper investigation.

Some modem-routers are capable of 4G as a backup connection or are built to use 4G or 5G signals. Depending on what your plan is or which provider you’re using, you might not have access to this, but it’s worth checking. For 4G or 5G only internet, consider picking up mobile broadband or home wireless broadband.

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.

Unlimited Basic Evening Speed (NBN 12) Plans

The following table shows a selection of published unlimited Basic Evening Speed (NBN 12) 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.

iiNet

iiNet includes modem-routers optionally with many of its plans over both ADSL and NBN connections, offered free if you remain connected to your plan for 24 months. Currently, iiNet’s included NBN modem comes with a maximum cost of $192 on a month-to-month plan, and a $10 delivery fee applies.

  • Plans include a high-speed modem with 4G network backup and Advanced WiFi 6 capability.

With iiNet, unlimited plans start at about $69.99 per month for NBN 25 speeds.

Dodo

Dodo provides unlimited data from just $65 per month on NBN 25, and a modem can be bundled in for $60. The included modem is a Dodo-branded ‘HG659’ modem, and can be purchased outright when you sign up.

  • The included modem is a dual-band gigabit router and is ready for the NBN. It features two USB ports for media sharing and wireless printing.

To get the best deals you usually need to sign up for two years, but to see Dodo include a high-performance router for $0 is promising.

Optus

Optus has unlimited data starting from just $79 per month across both the NBN and ADSL connections. Plans are month-to-month plans and include a modem, with modem fees waived if you stay connected for 36 months.

  • Customers on the Internet Everyday or Internet Family Entertainer plans get the Optus Ultra WiFi Modem, which is $252 in total, or free if you stay connected for 36 months. The Internet Gamer plan comes with a $504 ASUS Gaming modem, which is free if you stay connected for 36 months.

Optus also offers entertainment bonuses, with Optus Sport included free on all NBN plans, while the Gamer and Entertainer bundle plans include additional extras tailored for that plan.

TPG

TPG has unlimited plans starting at around $60 per month and a choice of six speed tiers on the NBN – 12, 25, 50, 100, 250 and 1000. An optional WiFi modem is available with all plans, although you will be required to pay an upfront fee of $99.95. Otherwise, you can BYO.

  • The included modem is a TPG-branded one, and features dual-band AC capability, with four gigabit ports. It is also VoIP-capable. A $10 delivery applies.

TPG stands out for having NBN 50 speeds at only $10 extra over its base plans, and a ‘typical evening speed’ on that speed tier of around 50Mbps.

Telstra

Australia’s biggest telco includes its Telstra Smart Modem 3 with all NBN plans, and has unlimited data from $80 a month at NBN 25 speeds. The included modem is valued at $200, but is free if you remain connected for 24 months.

  • The Telstra Smart Modem 3 allows access to the Telstra 4G network if WiFi is down, with speeds up to 25Mbps.

The modem boasts AC classification, WiFi 6 technology and gigabit speeds, and features dual band 2.4Ghz and 5Ghz capability.

Other Providers

A number of other, smaller, providers also include modems as part of the plan – sometimes at no extra cost or on lengthy contracts! The standout providers below are:

  • MyRepublic – a TP-Link modem for $120 over 24 months, or $159 outright.
  • Aussie Broadband – optional modems from $149 upfront.
  • SpinTel – an optional NetComm modem from $130 upfront.
  • Belong – $60 Wi-Fi modem available for new customers

There are many other providers that include modems as part of their plans, all you have to do is hunt around for the best deals. Keep in mind that to get one included at no extra cost, you may have to sign up for a year or more.

Do I need a modem or a router?

Ask an electronics retailer for either a modem or a router and they’ll likely refer you to the same thing. Because these days the terms are used pretty much interchangeably, and often both the modem and router come in one neat package. Today you can’t really go wrong, but if you have a modem only, you will need a router as well.

  • A modem-router today can cost upwards of $700, or as little as $40-$50, but many brands include both components.

Alternatively, going with a provider with an included modem can take a lot of hassle out of the equation. Though if you’re a discerning buyer, going your own way may be more satisfactory. Remember – routers ‘route’ the Wi-Fi network around your home, and modems connect you straight to the internet. Happy shopping!

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