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A device that enables your computer to send digital signals via the Internet using a telephone line. The modem converts (or modulates) the digital signal, which doesn’t transmit efficiently over a phone line, into an analog signal that does. Once the analog signal reaches its intended target, the receiving modem converts it back into a digital signal (demodulation).

Merriam-Webster Online Dictionary
modem (noun)
a device that converts signals produced by one type of device (as a computer) to a form compatible with another (as a telephone)
modem (verb)
transitive verb
to send (as data) via a modem
Modem (Wikipedia)

A modem – a portmanteau of "modulator-demodulator" – is a hardware device that converts data from a digital format, intended for communication directly between devices with specialized wiring, into one suitable for a transmission medium such as telephone lines or radio. A modem modulates one or more carrier wave signals to encode digital information for transmission, and demodulates signals to decode the transmitted information. The goal is to produce a signal that can be transmitted easily and decoded reliably to reproduce the original digital data.

Modems can be used with almost any means of transmitting analog signals, from light-emitting diodes to radio. A common type of modem is one that turns the digital data of a computer into a modulated electrical signal for transmission over telephone lines, to be demodulated by another modem at the receiver side to recover the digital data.

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