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BUZZ-BT Group falls on Morgan Stanley downgrade

** BT Group (LSE: BT-A.L - news) falls 2.7 pct as Morgan Stanley (Xetra: 885836 - news) downgrades to "underweight" from "equalweight", top faller on FTSE 100.

** MS cites intensifying competition in broadband market and deepening pension liabilities as reason for downgrade.

** Also suggests BT may bid aggressively for better Premier League coverage, suggesting it may pay c.£1bn/pa rather than current figure of £246m - a 25 pct downgrade to 2017E free cashflow say MS.

** MS becomes fourth bank to rate a "sell", six "hold", fifteen "buy".

** BT dividend yield of 3.7 pct compares poorly to Vodafone on 5.9 pct (although uncovered for next two years).

Chart: http://link.reuters.com/seh33w

** Wealth manager Brewin Dolphin (LSE: BRW.L - news) says Vodafone could be a potential bargain if it covers its dividend.

(RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)