Telephone service in Europe and Asia is very expensive. This could be a very smart move by Google.
I've used Skype. It's interesting software, but not ready for primetime until they get better quality of the connection. It's probably inadequate server power or bandwith into their servers, but conversations on Skype can be nearly unintelligble at times, and the lag is quite noticeable.
But, as with everything in this industry, it will change. It's certainly got potential.
Google could kill off some telecom dinosaurs if they dont wake up and change.