Vodafone was among the FTSE 100’s fallers this morning after analysts at Societe Generale, the French bank, warned that investors had overlooked the rising cost of providing data services.

The broker cut its target price on the stock to 120p from 141p and reiterated its sell rating, noting that while there has been a lot of emphasis on continuing regulatory risks and its exposure to the weakening economic cycle, risks stemming from a rising network investment had been overlooked by the market.

Analysts said that as more of Vodafone’s revenues were generated from data the cost of supporting this growth was about to become clear to investors, with forthcoming spectrum auctions putting the process in the spotlight.

It said that taking into account all the countries where Vodafone operates the cost of its spectrum was likely to increase by £4.3 billion over the next two to three years if it is to deliver on its growth forecasts.

Shares lost 1.65p to 139.9p.

The fall came as Ofcom, the UK telecoms watchdog, said it was launching a consultation with industry players and consumers to increase competition and remove barriers to entry for new players in the £15 billion market.

Overall, the FTSE 100 rose 10.9 points to 5539.0 as gains for financials offset weakness in commodity stocks.

Financials gained after US peers closed higher and results from Credit Agricole, the French bank, were not as bad as expected. RSA Insurance led the index, up 6.9p to 152.7p, HBOS gained 13.5p to 306.75p and Royal Bank of Scotland added 6.75p to 228.5p.

Kazakhmys was among the heavy fallers, down 48p to £12.91, after posting disappointing first half results.

Big falls in house prices are no longer a surprise so the FTSE 250’s house building stocks took the latest Nationwide figures, showing prices fell 1.9 per cent in August, more or less in their stride. Taylor Wimpey rose 2.75p to 51p, Bellway added 29.5p to 623.5p and Barratt Developments gained 6p to 138.5p.

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