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Tesco is challenging Skype's dominance by launching its own cheap international calling app (pictured)

The cost of calling home from abroad has plummeted in recent years thanks to services such as Skype.

And prices could be set to fall even lower as Tesco is challenging the voice-over-IP service's dominance with its own low cost international calling app.

The Tesco Calling Card app is available for iPhone and Android handsets and offers international calls for as little as two pence a minute.

Holiday makers and football fans visiting Brazil for the World Cup, for example, would pay just 60p for 30 minutes, when using the app.

Tesco said a comparable length chat from a hotel in São Paulo would cost around £60.

A half-hour call from Spain using the app would cost just 30p, compared to a hotel phone in the Costa Del Sol, which the company said would cost £14.50.

The app can also be used to call overseas from the UK from just 1p per minute.

'The new app offers an even more convenient and cost effective way to keep in touch with loved ones over the summer, whether that be from the sun lounger to back home, or from the sofa in the UK to family living overseas,' said Tesco.

Users can earn £1 credit for downloading the app and £2 for referring friends. They can also make calls and send messages app-to-app for free.

The Tesco Calling Card app is available for iPhone and Android handsets and offers international calls, to any number, for as little as two pence a minute using a Wi-Fi connection. The app also lets people make calls and send messages app-to-app (pictured right) free of charge

Tesco Calling Card can also be used by people without a smartphone as they can buy traditional cards worth £5, £10 or £20 in the supermarket, which they can then use on holiday. The cards are valid for 90 days after purchase or topping up.

While Skype and Tesco's services both require an internet connection to work, an app called Ringo is offering calls between countries for the same price as local calls, using submarine cables. 

This means the app bypasses expensive carrier call costs, doesn't ask people to turn on roaming data and the firm claims is typically 25 per cent cheaper than Skype.

But the app does not have such a large geographical spread, as users can call up to 16 countries.

Holiday makers (stock image pictured) and football fans visiting Brazil for the World Cup, for example, would pay just 60p for 30 minutes, when using the app. Tesco said a comparable length chat from a hotel in São Paulo would cost around £60

While more companies are entering the low cost international calls market in new ways, Skype is trying to stay ahead of the game.

Microsoft has unveiled its new Skype Translator technology that it says can decode languages in real-time.

It means that during video calls the speech recognition software will allow two callers from different countries to talk with ease.

Around 300 million people use Skype and two billion minutes of conversation are spoken every day, so Tesco has some catching up to do before it rivals the VoIP giant.