Viber Gets Serious About Challenging Skype, Adds Free Text Messaging

Viber is the product of a small Israeli startup, Viber Media Inc. They launched the first version of their VoIP app back in December of last year to rave reviews.
Much like Skype, Viber makes free phone calls over Wi-Fi and 3G to other users with the Viber client. Unlike Skype, there’s no need to create an account.
The typical process for making calls with 3rd party applications can be tedious. Signing up for accounts, verifying email address, and setting up contact lists are usually involved when using Skype or similar services. Viber made some waves with their no-username policy, and is set to do so again with the app’s latest update…
Posted March 31st, Viber 2.0 brings free text messaging. Free SMS messages can now be sent between Viber clients. While other applications have had this feature for quite some time, it was certainly missing from Viber’s initial release. Free SMS was a much needed addition if Viber Media really wanted to eat into Skype’s massive market share.
Where Viber really shines is the easy setup. After downloading the app, there’s little to do in terms of making your iPhone Viber-capable. The first time you launch the application, it asks you for your phone number. Inputting your number initiates a quick text message with a 4-digit code. Entering this code in Viber both verifies the user, and authorizes the app to access your contact list.

If you have any friends in your contact list that have Viber, they will immediately be labeled in the application. No need to create your own contact list or Viber name, it uses your existing address book. As I figured, none of my friends or family were current users.
I tried the ‘Invite Friends’ feature to get a few people onboard with me to check this thing out. To my disappointment, it just sends a SMS message with the website link. A direct App Store link would have been much more effective.
Overall, the app was enjoyable to use. There were no annoying ads, mention of Viber-points, or requests for in-app purchases. I also enjoyed the fact that the app sent me push notifications to alert me that a contact was trying to reach me.
The app does have to run in the background, but the company claims their app won’t take up any RAM or negatively effect battery life. Text messages came quickly and call quality proved superb throughout my trials.

Although the competition has recently added free video calling to their mobile applications, Viber still has hope to survive. The app is currently only available on iOS, but Android and BlackBerry versions are said to be on the way. This is also a necessity for Viber’s success. Competitors, like Skype, have been on multiple OS platforms for quite some time.
My question is, with no advertisements or in-app purchases, how does a free app intend to make money? At any rate, Viber 2.0 is available for free in the App Store.
Have you tried Viber yet? What do you think? Do you like it more than Skype?