The following is taken from the above manual.

A Modem - what it does and why

A modem is a device which enables digital equipment such as data terminals and computers to be connected via Post Office telephone lines which were originally intended for voice communication only. Basically a modem consists of two independant parts:-

(1) MODULATOR - this converts the DTE digital signal into audio signals for transmission over telephone lines.

(2) DEMODULATOR - this reconstructs the original digital signal from thr audio signals transmitted by the remote modulator.

Thus the word MODEM derives from the two sections of the device - the MODulator and the DEModulator.