Yugatech explains Smart 1.5GB cap on Smart Communications Mobile Internet Plans:
In order to avoid regular users from being affected by the heavy users, the heavy users (those who exceed the 1.5GB cap) are isolated and transferred to a different network segment or bucket. The allocation for that small group in the segment is then limited. Hence, only the heavy users will be competing for the limited bandwidth in their bucket while all the regular users remain on the regular, uncongested network.
You can read the rest of the article here, which also explains broadband capping in general.
I know this may sound strange to many, but I actually would be more inclined to apply for a service with a cap than one without. Since this should mean more consistent speeds. I do have separate internet connections for my home (Globe DSL), my office (Smart Bro) and a separate mobile connection (Smart 3G). I do not try to use a single connection for all my needs. Now if you are the type to tether your mobile phone to your desktop when you get home, the cap is not going to be something you like.
More than three years ago, I used to use Globe Visibility, until it slowed down to a crawl and one day simply stop working. I move over to Smart 3G, at Php10 for 30 minutes. It used to be fast and consistent until Smart Communication started to offer unlimited 3G access for a fixed fee a month.
Eat-all-you-can without any limit sounds good. Unlimited means having one rate for all, which means setting one rate for all. This results in light and moderate users having to pay for bandwidth used by heavy users or as what it most likely happening, the service provided simply maintaining the best service they can for Php999 a month regardless of whether it is satisfactory or not.
The service providers in offering unlimited services opened up a pandora's box, which they will now have a hard time closing. But pay-as-you-go is always a better policy. Service providers should just provide plans with higher caps for heavy users and charge with higher fees for those plans. There is no such thing as a free lunch. If you really demand unlimited without limits, in the end all you can expect is poor service.