How much RAM and swap space are you configured for now?
You are using the MATLAB Student Version, aren't you? Those are officially only the 32 bit versions, so if you cannot configure enough RAM and swap space in your existing system, then you will not be able to read larger files by getting more RAM.
Have you considered splitting your files in to even smaller pieces?
I have completely lost track of what you intend to do with the arrays once you have read them in?
Interesting, Andrei; I had quite forgotten that flag.
I am, however, not convinced at the moment that the array really is sparse; Huda earlier (in a different Question on this same topic) made reference to the array indices being sequential.
You can also select a web site from the following list
How to Get Best Site Performance
Select the China site (in Chinese or English) for best site performance. Other MathWorks country sites are not optimized for visits from your location.