AT&T Mobility’s narrow lead on Verizon Wireless for overall subscribers just got 1.7 million customers wider. AT&T said today it has finalized its $2.8 billion cash acquisition of Dobson Wireless and has begun the transition of its rural and suburban networks and customers into the AT&T fold.

AT&T closed the deal just four and half months after announcing it in July. Since then AT&T has received regulatory approval from the FCC and the U.S. Department of Justice, but only after AT&T agreed to divest Dobson operations in four rural markets in Kentucky, Oklahoma and Texas where AT&T currently operates. AT&T has also agreed to give up rights to the Cellular One name Dobson operates under, sell off minority stakes in Mid-Tex Cellular and Northwest Missouri Cellular, and limit its eligibility for Universal Service Fund subsidies in the traditional underserved Dobson markets.

AT&T will rebrand the Dobson Cellular One service as AT&T and plans to have temporary sign-up at all of Dobson’s 200 retail storefronts as well as its entire portfolio of products by December 9. AT&T plans to complete the rebranding by the end of the second quarter.

Tier 2 wireless operators have become the latest target of the industry’s unquenchable merger and acquisition spree. Starting last year, Sprint began buying up all of its regional affiliates in the wake of its acquisition of Nextel. In September, T-Mobile agreed to buy SunCom Wireless for $2.4 billion. And in July, a group of private equity investors took Alltel private. One highly publicized deal that failed to happen, though, was the proposed merger of Leap Wireless and MetroPCS, two mid-sized operators with similar locally centered business models.

Dobson runs cellular (800 MHz) GSM and Edge networks in rural markets and suburban areas across the country, while AT&T has both cellular and PCS (1900 MHz) networks nationwide. The acquisition will further increase AT&T’s footprint to cover 290 million people, the vast majority of the population.

Dobson’s additional 1.7 million customers would give AT&T approximately 67.4 million customers at the end of the third quarter. Verizon Wireless reported 63.7 million subscribers at the end of the third quarter, while Sprint had 54 million and T-Mobile had 27.7 million.