It’s the application Steve Jobs says he has no intention of putting on the iPhone.

And it’s here anyway.

On Wednesday, an Israeli company called Fring began offering free downloads of a program that lets you make toll-free phone calls on an iPhone, bypassing AT&T and every other cellular carrier. In other words, it does for the iPhone what Skype does for computers.

Technically, the service Fring offers is peer-to-peer Mobile VoIP (voice over Internet Protocol), and like Skype it requires that both parties first install the Fring client on their mobile phones. Both devices must also be Jailbroken before Fring can be installed, a multi-step process that voids your Apple AAPL warranty (and hasn’t worked for me for several firmware upgrades).

Fring was co-founded by Avi Shechter, one of the guys who ran ICQ, the first Internet-wide peer-to-peer instant messaging service. Fring also supports MSN Messenger, Google Talk, ICQ, SIP, Twitter, Yahoo and AIM.

Once your phone is Jailbroken (see, for example, here), you can download Fring at the “fringcubator” here. Below the fold: a video showing the software in action.