A system and method for improving intelligibility of speech is provided. The system and method may include obtaining an input audio signal frame, classifying the input audio signal frame into a first category or a second category, wherein the first category corresponds to the noise being stronger than the speech signal, and the second category corresponds to the speech signal being stronger than the noise, decomposing the input audio signal frame into a plurality of sub-band components; de-noising each sub-band component of the input audio signal frame in parallel by applying a first wavelet de-noising method including a first wavelet transform and a predetermined threshold for the sub-band component, and a second wavelet de-noising method including a second wavelet transform and the predetermined threshold for the sub-band component, wherein the predetermined threshold for each sub-band component is based on at least one previous noise-dominant signal frame received by the receiving arrangement.