I've been playing around with with the Cell C contract builder: http://www.cellc.co.za/99c-build-your-own-contract
I see that you can now "upsize" the individual components, such as data. I'm not sure whether you could do this before, but either way, this addresses the biggest criticism I had with Cell C's new contracts, which is that it doesn't make sense to link data, SMS and voice minutes together in a fixed 1:1:1 ratio. Now you don't have to do this.
Cell C's rates are really good. For example, if you select "no phone", "Straight Up 30", and then "upsize" your data to 1gb per month, you get a total figure of R185. This is, to put it mildly, pretty great. Compare this with Vodacom, where I have to pay R279 just for 1gb of data, and that doesn't even include any voice minutes on the side.
And yet, one of the interesting things about Cell C's contracts is that they still feel pretty expensive once you've added in a phone. In fact their pricing advantage largely disappears.
Let's say you take a Galaxy SIII and upsize the data by 100mb. This means you get a phone, 130mb of data, 30 minutes of airtime, and 30 messages, for R378. Meanwhile, if you go with Vodacom, you can get the Galaxy SIII on Business Call for R369 per month. Admittedly, this doesn't come with any free minutes or SMS messages, but it does give you 250mb of data, nearly twice as much data as the equivalently-priced deal on Cell C. You might still prefer to take the Cell C deal (depending on how much value you place on having some bundled voice minutes), but certainly, it is no longer the obviously superior choice.
After playing around with Cell C's sliders, it becomes evident what they're doing. They've stopped subsidising phones. In a traditional cellular contract, you make a promise to your network to keep using their service for at least 24 months, and not switch to a competitor. In return, they reduce the price of your handset. So, if you're on Vodacom prepaid and you spend roughly R135 per month on airtime, you can sign up for a TopUp 135 contract, and make a promise to keep buying R135 of airtime for at least the next two years. If you do that, Vodacom will drop the price of any handset you want by R2000. If you were going to buy that airtime anyway, that's a good deal.
This is a time-honoured business model that is used by mobile service providers all over the world. It's also a business model that has been widely criticised, because it creates perverse incentives and encourages the networks to try to lock their customers in rather than compete with each other on price. But it does also make it much easier for ordinary people to afford high-end phones, and it drives the rapid adoption of new technology. To be honest, we probably wouldn't have such rapid progress in mobile technology if it weren't for the two-year upgrade cycle that is encouraged by contracts and subsidies.
Cell C seems to have completely stopped using this business model. If you take a longer or more expensive contract, it doesn't reduce the price in any way. Let's say you take a Galaxy SIII on Straight Up 30 contract that lasts 24 months. This means you're paying R363 per month. If you subtract R30 (the value of the contract without the phone), that works out to R7992 for the phone. By contrast, if you reduce that to a 1-month contract (yes, you can do such a thing), it costs R8029. Subtract R30 for the airtime and data, and you're left with... R7999. On a Straight Up 400 contract over 24 momnths, the amount you'll pay for the phone is (you guessed it) R7992, ie (733-400)*24. Essentially, the value of the subsidy on a 24 month contract is now R7.
This is a really interesting ideological shift on the part of Cell C. The one thing that all other cellular networks agree on is that they don't want to become a dumb pipe. But Cell C is saying, in effect, that they actually don't mind being a dumb pipe. They don't really want to sell us shiny gadgets. (*With exception of the iPhone - more on this in a bit.) They don't really care about locking us in for long periods of time. (If you select the "no phone" option, their contracts cost the same regardless of whether you take the 24 month option or the 1 month option.) If you want a new phone with your contract, they are willing to sell you one, in which case they will simply take the purchase price and divide it over however many months your contract is. But they're not going to incentivise you to buy a new phone by subsidising it, nor are they going to pretend that your upgrade is "free". Instead, they take the radical step of making it completely transparent what your new phone is actually costing you. In the case of the SIII, it's R7992.
From the consumer's point of view, this is both good and bad. Cell C is doing a lot of things right here - they're making their costs transparent, competing purely on the price of their services, and they're not trying to lock their customers in. That's awesome. On the other hand, the fact remains that if you buy a phone from Cell C, you'll end up losing most of the money you would otherwise have saved from their cheap services.
So, what's the solution? As I see it, there are two:
1. Take the iPhone. I mentioned that before that iPhone is the only device that Cell C does subsidise. It's not a direct subsidy - instead, Cell C adds an extra 300mb of data to your contract for free if you take an iPhone. This means you can spend less on data, which in turn makes the contract cheaper, so it has the exact same effect as a subsidy in the end. You can complain that this is unfair to Android users. In fact, I have made this very complaint on this forum. Nevertheless, the fact the remains that of all the devices on Cell C, the iPhone is clearly the best deal. In fact, I would say that if you want an iPhone, Cell C offers a better deal than any other network in the country. If you're an iPhone fan, the choice is really simple.
2. If, on the other hand, you want something other than an iPhone, the best option is to buy a phone from someone else that sells it for less than what Cell C does. Buy one of the special offers on Guzzle.co.za (note: not all of them are good); buy a phone second-hand; from your bank (if you're with FNB or Standard); from another network that is offering a good deal on a particular device (eg the infamous Desire S for R89 pm special); or if you're an international traveller, from overseas. (The last one is a particularly compelling option now that Google has started selling its unlocked Nexus devices for very reasonable prices.) Just don't buy your phone from your own cellular network.
tl;dr Cell C's services are cheap, but their phones are expensive. You should buy your cellular service from Cell C, and your phone from someone else.