AT&T customers upgrading to Apple’s newest iPhone will be able to keep their grandfathered unlimited data plan and purchase the phone at discounted prices starting at $199, with a new two-year contract.

AT&T’s definition of “unlimited” has, for at least a year, actually meant up to 3GB of usage before throttling your 3G speeds to something comparable to dial-up Internet. But with the iPhone 5 ready to run on AT&T’s higher capacity 4G network, the company is increasing the limit to 5GB per month.

AT&T has been working hard to hold onto its significant base of iPhone owners, who have endured dropped calls and slow data in many cities for the last several years.

Customers planning to leave AT&T will find a considerably less-friendly attitude at Verizon Wireless, where new customers are compelled to sign up for a Share Everything plan that starts with just 1GB of usage per month.

Sprint is retaining its unlimited smartphone data plan with no hidden limits or speed throttles, but Sprint’s overburdened 3G network is not known for fast and reliable speed, and the company’s aging 4G Clearwire WiMAX network cannot perform as well as Sprint’s forthcoming LTE counterpart, which has only appeared in a handful of cities so far.

The iPhone 5 will be the first Apple phone ready to take advantage of 4G LTE speeds, which could give those new networks a real workout as millions of new iPhone owners pile on.

Other stories of interest:

1. Verizon Wireless Customers: 48 Hours Left to Secure Unlimited Data/Unlimited 4G Tethering Plans
2. AT&T Allows Long-Standing Smartphone Customers to Switch Back to Unlimited Data Plans
3. On the Other Hand: Wild Speculation About Verizon iPhone Data Pricing Up to $120 a Month
4. iPhone 4 Pre-Orders for Existing Verizon Customers Begin As AT&T Retention Goes All Out
5. Media Frenzy: The Second Coming… of the iPhone, Headed to Verizon Wireless With Unlimited Data