Skype is VOIP (voice over internet protocol address) client and makes connections through WiFi and not through cellular network. The main advantage over using Skype is that if the person you are calling to also uses Skype then making the call doesn't cost you anything. The main benefit of using Skype on iPhone is that one can purchase Skype credits from their website and call any landline number in the world. Skype is also a video chat client but the quality of video is not that clear on iPhone.
The disadvantage of using Skype is that you can't call emergency services and the company accepts it. The future iPhones will be having video capturing capabilities which will give a palmtop or laptop kind of an experience on using Skype over the iPhone.
Skype is free to download for iPhone.
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