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While broadband is always better (although there are sometimes problems using a WiFi connection), we have found Skype to work quite well on 56k modem lines (even as low as 33.6k, especially since Skype for Windows V2.5.0.122). If you are using a slow line, the sound quality will be marginal at first - wait for 20-30 seconds until Skype switches to lower bandwidth.

See http://www.HL7.com.au/Skype.htm#Speed

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Q: What is the minimum connection speed for Skype to Skype calls?
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