Exhibit
  4.16



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|DATED 7th
      April 2008                                                                 
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|DIRECTOR'S
      SERVICE CONTRACT                                                          
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Group Legal Services
      BT Group plc
      81 Newgate Street
      London
      EC1A 7AJ
|                                                                                           
|Tel : 020 7356 5238                                                                        
|                                                                                           
|Ref: 35301/JWF/JJM                                                                         
|                                                                                           

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Table of Contents

CONTENTS

|         |                               | Page
|-------- | ----------------------------- | ----
|         |                               |     
|1.       | Interpretation                | 1   
|         |                               |     
|2.       | Period                        | 1   
|         |                               |     
|3.       | Duties                        | 1   
|         |                               |     
|4.       | Conflicts                     | 2   
|         |                               |     
|5.       | Salary                        | 2   
|         |                               |     
|6.       | Pension                       | 2   
|         |                               |     
|7.       | Holiday                       | 2   
|         |                               |     
|8.       | Car                           | 2   
|         |                               |     
|9.       | Telecommunications Facilities | 3   
|         |                               |     
|10.      | Health Cover                  | 3   
|         |                               |     
|11.      | Medical Examination           | 3   
|         |                               |     
|12.      | Expenses                      | 3   
|         |                               |     
|13.      | Professional Subscriptions    | 3   
|         |                               |     
|14.      | Grievance Procedure           | 3   
|         |                               |     
|15.      | Obligation to Provide Work    | 3   
|         |                               |     
|16.      | Termination                   | 4   
|         |                               |     
|17.      | Confidentiality               | 5   
|         |                               |     
|18.      | Copyright                     | 5   
|         |                               |     
|19.      | Restrictions                  | 5   
|         |                               |     
|20.      | Continuation                  | 5   
|         |                               |     
|21.      | Variation                     | 5   
|         |                               |     
|22.      | Notices                       | 6   
|         |                              
|Schedule | 7                            
|         |                              

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Table of Contents

DATED 7th April 2008



|PARTIES
|-------
|       
|1)     
|       
|2)     
|       
|1.     
|       
|1.1    
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|       
|1.2    
|       
|1.3    
|       
|2.     
|       
|       
|       
|3.     
|       
|3.1    

1

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|3.2 | The Director will perform such duties,
        as would be reasonably expected of a Chief Executive, for the BT Group
        and Associated Companies, at such locations in the United Kingdom or
    overseas, as the Board or the Chairman may specify.                    
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                               
|3.3 | The Director will be bound by the BT
        share dealing rules, any other rules specified by the Board and BT's
    Articles of Association as altered from time to time.                                                                                                   
|    |                                                                                                                                                                                                                                                                               
|4.  | Conflicts                                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                               
|4.1 | The Director will promote, and not do
        any thing which is harmful or conflicts with, the interests and reputation
    of the BT Group.                                                                                                                                 
|    |                                                                                                                                                                                                                                                                               
|4.2 | The Director will not without obtaining
    the written consent of the Chairman:                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                               
|    | 4.2.1                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                               
|    | 4.2.2                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                               
|4.3 | The Director will pay to BT any fees
        received from any directorship of another company, unless BT otherwise
    agrees.                                                                                                                                               
|    |                                                                                                                                                                                                                                                                               
|5.  | Salary                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                               
|5.1 | The Director will be paid the Salary
        in twelve equal monthly instalments, payable on the last business day
    of each month.                                                                                                                                         
|    |                                                                                                                                                                                                                                                                               
|5.2 | The Director may be paid a bonus at
    the discretion of the Board.                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                               
|5.3 | The Director may, at the discretion
        of the Board, participate in any scheme established for BT employees
        to acquire shares in BT subject to the applicable rules of the scheme,
    but participation under such schemes will not form part of this Agreement.
|    |                                                                                                                                                                                                                                                                               
|6.  | Pension                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                               
|6.1 | BT will pay an amount of
        30 per cent of the Salary in each year as a contribution to the Director's
        personal pension by twelve monthly instalments, payable on the last day
    of each month.                                                                
|    |                                                                                                                                                                                                                                                                               
|6.2 | The Director will be entitled
    to life insurance cover equal to four times the Salary.                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                               
|7.  | Holiday                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                               
|    | The Director will be entitled
        to paid statutory holidays and to 27.5 days' paid holiday in each year
        which accrues rateably each month in arrears, to be taken at times agreed
    with the Chairman.                                                         
|    |                                                                                                                                                                                                                                                                               
|8.  | Car                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                               
|    | The Director will be provided
        with a car as determined by BT and BT will meet the cost of maintenance,
    insurance, motor vehicle tax and petrol.                                                                                                                   

2

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|9.   | Telecommunications
    Facilities                                                                                                                                                                                                                    
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                      
|     | BT will provide telecommunications facilities
        and home security at the Director's main residence and a free call allowance
    all as determined by BT.                                                                                      
|     |                                                                                                                                                                                                                                                      
|10.  | Sick Pay and Health Cover                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                      
|10.1 | The Director will be entitled to receive
        sick pay (inclusive of any statutory-sick pay and any benefits payable
    under any permanent health insurance effected by BT) of:                                                                 
|     |                                                                                                                                                                                                                                                      
|     | •                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                      
|     | •                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                      
|     | in total in any period of two years,
        subject to production of medical certificates and to such other requirements
    as BT may reasonably request.                                                                                          
|     |                                                                                                                                                                                                                                                      
|10.2 | BT will arrange private health cover
        for the Director, the Director's spouse and children under the age of
        18 (or 21 if in full-time education) and dental cover for the Director
    and the Director's spouse, as determined by BT.
|     |                                                                                                                                                                                                                                                      
|11.  | Medical Examination                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                      
|     | BT may, at its expense, require the
    Director to be examined by a medical practitioner of BT's choice.                                                                                                                                            
|     |                                                                                                                                                                                                                                                      
|12.  | Expenses                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                      
|     | BT will reimburse authorised expenses
        properly incurred in the course of the Director's duties against receipts
    or other proof of expenditure.                                                                                           
|     |                                                                                                                                                                                                                                                      
|13.  | Professional Subscriptions and Advice                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                      
|13.1 | The Director will be reimbursed subscriptions
        to professional bodies where the Chairman considers it to be in the interests
    of BT.                                                                                                       
|     |                                                                                                                                                                                                                                                      
|13.2 | BT will pay the cost of personal tax
        and financial planning advice up to a maximum of £5,000 (excluding
    VAT) a year.                                                                                                                     
|     |                                                                                                                                                                                                                                                      
|14.  | Grievance Procedure                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                      
|     | If the Director has any grievance he
        may apply in writing to the Chairman who personally will either propose
    a solution or refer the matter to the Board.                                                                                
|     |                                                                                                                                                                                                                                                      
|15.  | Obligation to Provide Work                                                                                                                                                                                                                           
|     |                                                                                                                                                                                                                                                      
|15.1 | BT is under no obligation to provide
    the Director with work and may:                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                      
|     | 15.1.1                                                                                                                                                                                                                                               

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|     | 15.1.2                                                                                                                                                                                                                                                                                                                                                                                           | if notice to terminate this Agreement
        has been given, vary the Director's duties or require the Director to
    cease performing all duties during all or part of the notice period,                                              
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | in which case BT may exclude the Director
        from the premises of the BT Group but will continue to pay the Salary
        in accordance with Paragraph 5.1 and provide the benefits under this
    Agreement until this Agreement terminates.                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|15.2 | Where Paragraph 15.1.2 applies, the
        Director will at BT's request promptly resign in writing as a director
        of BT (and as a member of any committee of the Board) and of any company
        of which BT is a shareholder (if necessary, in accordance with Paragraph
        16.6) but this Agreement will not terminate on the Director resigning
    under this sub-paragraph.
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|16.  | Termination                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|16.1 | This Agreement will terminate immediately,
    without compensation:                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.1.1                                                                                                                                                                                                                                                                                                                                                                                           | subject to Paragraphs 15.2 and 16.3,
        if the Director ceases to be a Director under the provisions of BT's
    Articles of Association as altered from time to time; or                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.1.2                                                                                                                                                                                                                                                                                                                                                                                           | if the Director fails in the reasonable
        opinion of the Board satisfactorily to perform his duties after receiving
    a written warning.                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|16.2 | BT may terminate this Agreement without
    notice, and without compensation, if the Board believes that the Director:                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.2.1                                                                                                                                                                                                                                                                                                                                                                                           | is incapacitated for any reason from
        performing the Director's duties for a period of one year or periods
    totalling 365 days in any period of two years;' or                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.2.2                                                                                                                                                                                                                                                                                                                                                                                           | is guilty of any dishonesty or disreputable
    conduct; or                                                                                                                                                                               
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.2.3                                                                                                                                                                                                                                                                                                                                                                                           | is guilty of any misconduct or neglect
    of duty after receiving a warning; or                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.2.4                                                                                                                                                                                                                                                                                                                                                                                           | is repeatedly failing to follow BT's
    policies and procedures.                                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|16.3 | If the Director ceases to be a director
        of BT because he is not re-elected or deemed to be re-elected at a general
    meeting, BT may either:                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.3.1                                                                                                                                                                                                                                                                                                                                                                                           | terminate this Agreement subject to
    paying compensation in lieu of notice; or                                                                                                                                                         
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|     | 16.3.2                                                                                                                                                                                                                                                                                                                                                                                           | require the Director to perform such
        duties for the BT Group (other than as a director of BT), subject to
        these being commensurate with the Director's organisational level, as
    the Board or the Chairman may specify.
|     |                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                           
|16.4 | Instead of giving the Director the twelve
        months' notice referred to in Paragraph 2, BT may (but shall not be obliged
    to) terminate this Agreement immediately by:                                                                                                                                                                                                                  

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|     | 16.4.1                                                                                                                                                                                                                                                                                                    | paying the Director the Salary in accordance
      with Paragraph 5.1, and                                                                                                                                                                    
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|     | 16.4.2                                                                                                                                                                                                                                                                                                    | continuing or paying the value of the
      benefits referred to in Paragraph 16.4.3 as provided under this Agreement,                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|     | until the earlier
      of twelve months from the date of termination or the Director obtaining
      full-time employment;                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|     | 16.4.3                                                                                                                                                                                                                                                                                                    | the benefits are the pension benefits
      (including life cover), health cover; dental cover, the car currently provided
      on termination together with the cost of maintenance, insurance and motor
      vehicle tax (but not petrol).
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|16.5 | Upon termination
      of this Agreement the Director will at BT's request promptly resign in writing
      as a Director of BT (and as a member of any committee of the Board) and
      of any company of which BT is a shareholder, and will promptly return to
      BT any property of the BT Group.
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|16.6 | The Company
      Secretary of BT is irrevocably authorised to sign a .letter of resignation
      on behalf of the Director if he fails to do so.                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|17.  | Confidentiality                                                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|17.1 | The Director
      will not disclose any confidential information relating to the BT Group
      or any third party which may have been obtained in the course of this employment.                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|17.2 | This prohibition
      does not apply to confidential information that comes into the public domain
      through no act or neglect of the Director.                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|18.  | Copyright                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|     | The copyright
      in any material arising from this employment is assigned to BT.                                                                                                                                                                                                                      
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|19.  | Restrictions                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|19.1 | The Director
      will be bound by the provisions of the Schedule to this Agreement.                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|19.2 | The 12 month
      periods referred to in the Schedule will be reduced by any time during which
      the Director has been suspended or excluded from the premises of the BT
      Group under Paragraph 15.1.                                                                                          
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|20.  | Continuation                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                           |                                                                                                                                                                                                                                               
|     | Paragraphs
      16.5, 16.6 and 17 to 19 inclusive will continue in force after the termination
      of this Agreement.                                                                                                                                                                                 
|     |                                                                                                                                                                                                                                                                                                          
|21.  | Variation                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                          
|     | BT may vary
      Paragraphs 7 to 10 inclusive, 13 and 14 but only after first consulting
      the Director.                                                                                                                                                                                            

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|22. | Notices                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                   
|    | Any notice or document may be served
      on the Director personally or by posting it to his last known address, or
      on BT addressed to the Secretary at its registered office, and if sent by
      first class post will be deemed to have been received within 24 hours of
      posting.
|    |                                                                                                                                                                                                                                                                                                   
|    | Signed by the parties on the date written
      on the first page of this Agreement                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                   
|    | /s/ Andrew J. Parker                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                   
|    | /s/ Ian Livingston                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                   

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SCHEDULE

|1. | In this Schedule:-                                                                                                                                                                                                                                                                                                                                                            
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | a)                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | b)                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | c)                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | d)                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                               
|2. | Since the Director is likely
        to obtain in the course of his employment with the BT Group, trade secrets
        and Confidential Information and, personal knowledge of customers and
        employees of the BT Group, the Director agrees with BT that he will be
        bound by the following covenants for 12 months immediately following
    the Expiry Date:
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | (i)                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | (ii)                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                               
|   | (iii)                                                                                                                                                                                                                                                                                                                                                                         

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|   | For the purposes of this
        Clause 2, any reference to "engagement or employment" means engagement
        or employment whether under a contract or otherwise and if under a contract
    includes a contract of employment, or a contract for services or any other
    form of contract and the terms "engage" and "employ" and their derivatives
    shall be construed in accordance with this definition.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     
|3. | Clause 2 shall apply mutatis
        mutandis in relation to Subsidiaries as if the provisions in sub-clauses
        (i) - (iii) inclusive and the definitions were repeated with the substitution
        of the words "any of the Company's Subsidiaries" for BT, and the Company
        contracts with the Director in this sub-clause on its own behalf and
    on behalf of each of its Subsidiaries.        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     
|4. | For the avoidance of
          doubt it is expressly agreed that each of the sub-clauses (i) -(iii)
          in Clause 2 is intended to contain separate and severable restraints
          and if any one or more of such sub-clauses are for any reason unenforceable
          in whole or in part, then the other sub-clauses shall nonetheless be
          and remain effective.                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     
|5. | The Director acknowledges
          that the restraints contained in this Schedule and each of them are
          necessary to protect the legitimate interests of the BT Group, are
          no wider than reasonably necessary for that purpose, and are reasonable
          as between the parties to this Agreement.                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     
|6. | If any of the restrictions
        contained in this Schedule shall be adjudged to be void or ineffective
        or unenforceable for whatever reason but would be adjudged to be valid
        and effective if part of the wording were deleted or the periods reduced
        or the area reduced in scope, they shall apply with such modifications
    as may be necessary to make them valid and effective.  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                     

|                     |   |                     
|-------------------- | - | --------------------
|SIGNED BY            | ) |                     
|ANDREW J. PARKER     | ) | /s/ Andrew J. Parker
|                     |   |                     
|                     |   |                     
|for and on behalf of | ) |                     
|BT GROUP plc         | ) |                     
|                     |   |                     
|                     |   |                     
|SIGNED BY            | ) |                     
|IAN LIVINGSTON       | ) | /s/ Ian Livingston  

8

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