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It depends which country you're in ! In the UK it's a feature of 'star services' - a series of 2-digit codes offering additional features to normal calling. You would receive or make the first call, then dial * XX number # where XX is the 3-ways code, and number is the second person's phone number. Once both parties are connected, you can all hear each other.

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Q: How do you get a three way land-line on home phone?
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