Despite improvements by carriers across the industry, Verizon has retained its top spot  in Consumer Reports' annual report on wireless customer satisfaction.

In a survey of more than 50,000 of its readers spanning 23 U.S. cities, Consumer Reports found that Verizon had the highest customer-satisfaction rating in 87% of the cities surveyed, including such major markets as New York, Chicago, Los Angeles and Washington, D.C. The survey measured several key indicators of customer satisfaction, including service availability, circuit capacity, dropped-call frequency and the presence of static.

Alltel is the only carrier to rank ahead of Verizon in any of the cities surveyed, taking first place in Tampa, Fla., Charlotte, N.C., and Cleveland. Verizon won't rank behind Alltel anywhere for very long, however: The carrier recently gained approval from the Federal Communications Commission to purchase Alltel for $28.1 billion, and is expected to complete the merger officially by year-end. (View a slide show of 2008's hottest M&A deals.)

On the flip side, Sprint Nextel ranked last in 20 of the 23 cities surveyed, with only AT&T ranking behind Sprint in New York, San Francisco and Miami. Sprint also ranked dead last in customer satisfaction: It received subpar marks for its staff knowledge and courtesy, as well as whether cell-phone service issues get resolved. Current Sprint CEO Dan Hesse made improving customer service at Sprint a top priority when he took over as chief executive last year, and the carrier has recently touted improvements in its cell-service quality ratings from consumer ratings group J.D. Power.

Overall, cell phone service has improved nationwide, Consumer Reports says; 60% of its readers reported being completely or very satisfied with their wireless service. Last year, in contrast, the survey found that less than half of respondents were either completely or very satisfied with their service. The major reasons for the surge in customer satisfaction include fewer connectivity problems, as well as fewer occurrences of static and dropped calls, the magazine says.

Consumer Reports is published regularly by the Consumers Union, a nonprofit group that regularly releases surveys grading customer satisfaction on everything from cars to computers to vacuum cleaners. The group's full report on cellular service and cell-phone quality will be published in its January 2009 issue.