You don't really have that many options if the lines are of different length... you sadly need to process the line ending characters to know when you've progressed to the next line.
You can, however, dramatically speed this up AND reduce memory usage by changing the last parameter to "open" to something not 0.
0 means the file reading operation is unbuffered, which is very slow and disk intensive. 1 means the file is line buffered, which would be an improvement. Anything above 1 (say 8k.. ie: 8096, or higher) reads chunks of the file into memory. You still access it through for line in open(etc):
, but python only goes a bit at a time, discarding each buffered chunk after its processed.