Bad Service and breach of contract

I upgraded my phone in Jan this year, i took a Micorsoft Lumina phone which after 1 week in my possession the speaker did not work. I took it in to Cell C Bluff where they took it tin and confirmed after 3 days that in fact it was mechanical damage. However till today i do not have a handset. I was told it was credited into my account, but i wanted nothing to do with the Lumnia so asked for another handset for Samsung etc. They told me that my contract had to be cancelled and my number to be changed from post paid to prepaid for this to be done, i was also told that i would be liable for a R600 cancellation fee...Why? the phone was broken due to mechanical damage, so why am i to pay a R600 cancellation fee when the issue was not with me in the 1st place but with the phone. I lost confidence in the Microsoft Lumnia brand and wanted to change, but i have to pay R600 to have this rectified???? to make things worse, i have been pushed left right and centre, been asked to call this and the next person to explain the same story over and over... To make things worse my old phone was ****** on Sunday, fortunately it was returned, but i had blocked and black listed so now i am phoneless