New broken contract phone

I took a contract with Telkom on October 2014, I then tried to insert the sim card but it was faulty, The very same day I took it back to Telkom Tzaneen I explained to them, they told me I must pay R700 for it to be fixed, I told them I will not pay anything I have never used the phone, they must take the phone and fix it or replace it, they fixed the phone but still insisted I pay for it, I refused and they refused to give me my phone, even today I have not received the phone. I called Telkom several times but still not successful because Telkom does not answer the phones you will hold for more than 5 hours. I want to cancel the contract because they have ever since been deducting my money for a phone I have never used. I am a very ****ed customer and does not encourage anyone to make deals with Telkom, when you have a query you are on your own, no one is willing to help you.