We show that the popular water-filling algorithm for maximizing the mutual information in parallel Gaussian channels is sub-modular. The sub-modularity of water-filling algorithm is then used to derive online basestation allocation algorithms, where mobile users are assigned to one of many possible basestations immediately and irrevocably upon arrival without knowing the future user information. The goal of the allocation is to maximize the sum-rate of the system under power allocation at each basestation. We present online algorithms with competitive ratio of at most 2 when compared to offline algorithms that have knowledge of all future user arrivals.