The Collaborative International Dictionary of English v.0.48:

modulator-demodulator \mod"u*la`tor-de`mod"u*la`tor\, n.
   An electronic device that converts electronic signals into
   sound waves, and sound waves into electronic signals, used to
   transmit information between computers by the use of ordinary
   telephone lines; usually called a modem.
   [PJC]

The Collaborative International Dictionary of English v.0.48:

modem \mo"dem\ (m[=o]"d[e^]m), n. [by shortening from
   modulator-demodulator.]
   An electronic device that converts electronic signals into
   sound waves, and sound waves into electronic signals, used to
   transmit information between computers by the use of ordinary
   telephone lines; also called modulator-demodulator; as, the
   latest modems can transmit data at 56,000 baud over a clear
   telephone line. The speed of transmission of information by a
   modem is usually measured in units of baud, equivalent to
   bits per second.
   [PJC]