This is Free Call and SMS using Viber

Viber : Free Calls & Messages
by Viber Media Inc.

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Viber is the most popular mobile application that supports free sms and call amongst Viber users.

You will see on your Viber contacts who among the list on your phonebook were already have a Viber account. You will also get notified once any of them are recently  installed and join in Viber (only if the notification is turn ON)

The disadvantages of this aapplication are
*You and the other party must be connected to the internet to be able to make a call successful.
*You and the other party (not simultaneous) must be connected to the internet to send and/or receive sms.
*You and the other party must have Viber installed on both of your phones.

But don't be discouraged on the disadvantages. All of the mobile application of same functions have same disadvantages as what Viber have. Internet connection is the main root why this free call and sms service makes possible.