You guys have all been spoilt by Vodacon and Mtn's hidden pricing structures over the years, thinking you're getting fancy new phones for reasonable prices, while actually paying crazy prices just to make phone calls or use data.
I reckon, either buy the phone you want outright, or buy a cheaper phone if you can't afford it. You do not need to have the latest / coolest phone. (well you do, but if you can't afford it, tough.)
You have to realise that there's no way Cell C's gonna be able to compete the the big 2's handset pricing. They don't have the buying power since they deal in much lower volumes. So their pricing will never match.
You have to prioritise - do you want a nice phone, or do you want to be able to USE your phone. In SA at the moment, it's one or the other, not both. Awesome phone but expensive data and talk charges, or cheaper phone but really good data and talk charges. Those are the only choices available to the SA consumer as far as I can see. For now, anyway.
(Unless you're making enough bucks to buy your awesome phone outright, then you can have your cake and eat it. But then I assume you're not on here complaining about Cell C's handset prices)
For example, personally I'm using a 2 year old Xperia mini. It's not great, but it allows me to use the apps I need, surf the web (thanks Opera), check mail etc. Also, it's still in great condition. When it eventually dies, I'll probably buy a Samsung Galaxy Pocket, or maybe that entry-level Motorola. Not my ideal choices, but I refuse to be tied into a 24 month contract with the likes of Vodacon just to get a nicer phone. Unless there's a really good deal / promo that'll allow me to actually pay less than cost (and even then I'd probably still put in a Cell C sim)