Iphone 7 software issue and now customer needs to pay

My wife's Iphone7 started causing GSM network problems after its last update. The phone was 13months old, and looked after like gold. after the update the phone did not want to make GSM network calls and the camera did not function properly at times, however all whatsapp functions including calling was in 100% working order. also when network settings were reset, the phone would for some time function as normal.

We took the phone in for assessment at our local istore where the technician did the required hardware and audio checks. BOTH were in order and no issues were picked up, to which he confirmed that the issue must be software related. when the technician then did the software reboot, the phone froze on the apple screen and he could not get t to function further, the phone was then sent in to apple service center.

The service center came back and reported the phone is now heating up on charge and it needs to be replaced, however they have sent us an invoice for R4970 excl. VAT for unit replacement.

How is this fair, as the phone was handed in in working order, and the issue arised because of an apple update. Now we need to fork out additional money because of them. had we known this would have happened we would have just kept the phone, and waited for another update which may have fixed the problem or "bug". we have raised this with the local store manager, however we have not received any different responce from him.