Methods, systems and computer program products are provided which utilize a variable threshold for carrier drop detection. The carrier drop detection threshold is updated based on a recognized data sequence contained within the signal received by the modem. The received signal is demodulated to obtain the signal data and an updated threshold is latched when a desired data sequence is recognized in the demodulated data. Accordingly, the threshold may be updated and set as an offset from or a percentage of the carrier signal level at the time of receipt of the desired data sequence. For example, in a V.90 modem using a V.8 phase 1 sequence, receipt of the CM signal (for the answer modem) or the JM signal (for the call modem) may be used to latch an updated level for the carrier drop detection threshold, which may then be used for detecting carrier drop during the silence transmission at the end of phase 1 to allow reliable preparation of the modem for receipt of the INFO0 signal at the start of phase 2.