Vodafone showed off an application it is working on code-named "Starfish," which would allow its users to chat with their buddies via MSN, Yahoo, AOL, and Skype, as well as make VoIP calls through the popular chat network.

Like the Skype service being offered by Vodafone competitor 3, which is owned by Hutchison Whampoa, Starfish uses a voice channel to place the VoIP call. Once the base station receives the call, it is then routed through the Internet.

VoIP has become increasingly popular as consumers look for cheaper ways to place long distance calls. In America, VoIP provider Vonage recently surpassed two million subscribers, and Skype claims to have about 171 million registered users worldwide.

Skype has ruled out any mobile version of its software produced by the company itself, as it said data plans still are too expensive to allow for widespread use of such a product.