A modem (Modulator/Demodulator) converts digital signals from data terminal equipment (DTE) into analog signals and vice versa. This allows communication between DTEs over analog facilities. The modem, therefore, is considered a form of data circuit-terminating equipment (DCE).
Modems can use a wide variety of modulation techniques, including amplitude shift keying (ASK), frequency shift keying (FSK), phase shift keying (PSK), differential phase shift keying (DPSK), quadrature amplitude modulation (QAM), and Trellis coded modulation (TCM). There are a variety of standards that govern the operation of modems, including V.90 and V.92, which are two of the more recent standards for modems used across the public switched telephone network (PSTN).
The accompanying visual illustrates the role of modems in enabling DTEs (in this example, a host and a terminal) to make use of analog transmission facilities to establish communication. Between each of the DTEs and its modem, the signal is digital; between the modems, the signal is analog.
Today, modems can be found built-in to computers and routers, and are also widely used in conjunction with digital subscriber line (DSL) and Internet services provided by MSOs on their hybrid fiber/coax (HFC) network infrastructure.