Vodafone is facing up to life without the title of the world's largest mobile phone company.

The Newbury-based group has lost its crown to China Mobile, a company which was only set up in 2000 and now has a market value of £69.7 billion, against £57.9 billion for Vodafone.

The change in the world order came last week after Vodafone shares lost six per cent of their value and China Mobile extended recent gains, which have lifted its Hong Kong-listed share price by 46 per cent over the past year.

According to reports yesterday, China Mobile also claims to be the world's largest mobile phone operator ranked by number of subscribers.

It has more than 200 million customers while the most recent figure from Vodafone shows 186.8 million worldwide. Vodafone's turnover is still ahead of China Mobile's.

The loss of top spot is another blow to Vodafone after several months of boardroom upheaval culminated in nearly ten per cent of Vodafone shareholders voting against the re-election of controversial chief executive Arun Sarin last month.

Since Mr Sarin, aged 51, took over the helm three years ago, the FTSE 100 Index giant has risen 40 per cent but Vodafone shares have dropped five per cent.

China Mobile has nearly 40 per cent of the Chinese market, while analysts expect it to expand its presence overseas.

Meanwhile, Italian internet firm Tiscali plans to merge its UK operations with privately owned Video Networks International to increase the content it provides to its clients.

Video Networks, which offers TV, broadband and telephone services under the Homechoice brand, will contribute its British operations in exchange for 11.5 per cent of Tiscali UK, and may increase the stake to 20 per cent if profit targets are met.