AT&T isn’t giving up its top-dog slot to Verizon Wireless so easily.

AT&T is buying Centennial Communications for $944 million in cash and in the process gaining 1.1 million wireless customers, which won’t propel AT&T over Verizon Wireless after it closes its acquisition of Alltel this quarter, but it will keep AT&T within striking distance.

Though the capital markets have dried up, it hasn’t stopped the wireless operators’ acquisition sprees. Verizon Wireless is not only picking up Alltel, but it acquired Rural Cellular Corporation this fall, further boosting its numbers. Meanwhile AT&T acquired Dobson Communications late last year to grow its already formidable subscriber base. Though both operators are showing they can attract new subscribers still, many of them are coming at the expense of Sprint, which lost 1.3 million net subscribers last quarter. The US wireless market is already close to saturation, with 275 million subscriptions in place, so future growth among the big operators may come from consolidation rather than organic consumer acquisition. Operators even appear willing to buy each other up in the current economic downturn.

Since Cingular purchased AT&T Wireless in 2004, AT&T has maintained the title of largest operator in North America. Verizon has closed the gap through several stellar quarters in which it outpaced AT&T in subscriber growth, but AT&T has always managed to fend off the rival operator. In the last quarter, AT&T reaffirmed its lead again with 1.7 million post-paid net additions, led by sales of the new iPhone 3G, bringing AT&T’s total subscriber base to 74.9 million at the end of September. Meanwhile, Verizon ended the quarter with 70.9 million subscribers, but over the last two weeks both the US Department of Justice and the FCC gave their approvals of Verizon’s acquisition of Alltel. The deal will add roughly 11 million to Verizon’s subscriber base, vaulting it over AT&T.

The Centennial acquisition will increase AT&T’s total customers to 76 million, still a far cry from Verizon’s 82 million, but AT&T may make up some more of that ground in the next few quarters if iPhone 3G sales continue to ramp up. According to an NPD study, the iPhone became the top-selling handset in the US in the third quarter, dislodging the Motorola RAZR, which has led for the last 12 quarters.