A Modem (short for modulator-demodulator) is a computer peripheral that allows your computer to connect to, and communicate with, other computer via telephone lines. This device converts the digital signal produced by the computer into analogue signals. These analogue signals are sent along a telephone lines to another modem, where they can are converted back into digital signal for the receiving computer. Anything that can be stored on a computer can be sent to another computer when connected by a modem and a phone line.
There are two types of modems available, namely: Internal and external modems.
Internal modem: An internal modem is fixed into an expansion slot located on the computer main board or it may be part of the computer main board (then known as integrated modem).
External modem: It is a separate unit, and connects to the computer via a cable. Five or six small lights on the top, or in front of the modem case, indicates the status of the modem and that of the data it is sending or receiving.