Skype...
You have to pay for the phone service, if you are calling cellphones or landlines. However, the fees are very modest at about $.02/minute. I put $10.00 on my account 6 months ago and I still have money left. But, I'm not a heavy Skype user....just occasional. Since I'm still in Germany, I use it mostly for international calls; both on the iPhone and the iPad.
If you are using Skype to Skype, then it's free.
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