A modem is a device that modulates analog signals to transmit digital data and demodulates received analog signals to reconstruct the original digital data. It has a transmitter that converts digital to analog, a receiver that converts analog to digital, and a control unit that handles functions like auto-dialing. Modems use various modulation techniques like amplitude modulation, frequency modulation, and phase modulation. They are classified by operation mode, synchronization method, transmission medium, and modulation technique. Newer technologies like DSL provide higher speeds over telephone lines than traditional modems.