Microsoft releases version 5.13 of the Skype for iPhone app
With the Apple Watch, you can start a Skype conversation with one of your favorite contacts directly from your wrist. To favorite a contact, go to the iPhone app, swipe to the favorites view and tap add favorites at the bottom of your favorite list. You can then start a conversation from your timepiece. And the latest update to the Skype for iPhone app allows you to mark all conversations read by using Force Touch on the Apple Watch.
When some one is calling you via Skype, your Apple Watch will give you the option to accept or decline the call. If you decide to answer, the call is routed through your iPhone.
While the Skype for iPhone app is free to download from the Apple App Store, it does come with in-app purchase options. Keep your wallet handy.
source: SkypeforiPhone (iOS) via WMPoweruser