**Exhibit 4.8**

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Phil HodkinsonGroup Finance DirectorHBOS plcThe MoundEdinburghEH1 1Y2

10 January 2006

Dear Phil,

Upon the recommendation of the Nominating Committee,the Board of BT Group plc has appointedyou as a non-executive director. This letter sets out the terms of your appointment. 

**Appointment**

Your appointment is for an initial period of three years from 1 February 2006.During that period either you or the Board can give the other at least threemonths written notice to terminate the appointment at any time.

In accordance with the Company’s Articles of Association you will be requiredto stand for election at the Company’s next Annual General Meeting and duringyour period of appointment you may be required to stand for re-election at subsequentAnnual General Meetings. Subject to your re-election as a director at the AnnualGeneral Meeting and satisfactory performance by you of your duties as a non-executivedirector the appointment may be continued at the end of the initial three yearperiod if you and the Boardagree.

**Time commitment**

You are expected to attend all meetings of the Board and those Board Committeesto which you are appointed (and if you cannot attend any meeting to advise theSecretary in advance), the Annual General Meeting and one or more Board awaydays. In addition, you will be expected to devote appropriate preparation timeahead of each Board and Board Committee meeting and to take part in at leastone visit each

 

| **Sir Christopher Bland**      Chairman      BT Group      BT Centre      81 Newgate Street      London EC1A 7AJ      United Kingdom | **tel** (020) 7356 4324**int** +44 20 7356 4324**fax** (020) 7600 8197**int** +44 20 7600 8197 |   | **BT Group plc**        Registered Office:        81 Newgate Street, London EC1A 7AJ        Registered in England and Wales no. 4190816**www.bt.com** |
|--------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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year to one of BT’s offices or other sites.It is difficult to be precise about the amount of time you should expect to spendon this work, but we estimate that you should allow a minimum of 22 days eachyear, subject to Committee commitments. You should allow a slightly higher commitmentin the first year of your appointment whilst you familiarise yourself with theBT group and go through our induction programme for new directors. 

By accepting this appointment, you have confirmed that you are able to allocatesufficient time to meet the expectations of your role. The agreement of the Chairmanshould be sought before accepting additional commitments that might affect thetime you are able to devote to your role as a non-executive director of the Company.

**Role**

Non-executive directors have the same general legal responsibilitiesto the Company as any other director. The Board’s principal focus is thestrategic direction, development and control of the group. In support of thisit approves the group’s values, business practice policies, strategic plans,annual budgets and the group’s overall system of internal controls, governanceand compliance authorities. It also has oversight and control of the group’soperating and financial performance. These responsibilities are set out in theformal statement of the Board’s role which you have received in your directors'briefing pack.

**Fees and expenses**

You will receive fees for your services as a director of £40,000 a year.You will be entitled to additional fees at the rate of £5,000 a year foreach Board committee to which you are appointed, and an additional £5,000a year for each committee you are appointed to chair.

The Company will either pay or reimburse you for all travelling, hotel and otherexpenses incurred on the Company’s business.

**Outside interests**

It****is accepted and acknowledged that you have business interests otherthan those of the Company. You are required to disclose to the Board, via theSecretary, any interests you have at the date of your appointment. Advice onnotifiable interests is enclosed in your briefing pack. In the event that youbecome aware of any further potential conflict of interest during your periodof appointment, you must disclose this to the Secretary as soon as it becomesapparent.

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**Confidentiality and share dealings**

All information acquired during your appointment is confidential to BT Groupplc and should not be released (by whatever means), either during your appointmentor following termination, to third parties without prior clearance from the Secretary.You also undertake to keep secure any information and materialsent to you.

Your attention is also drawn to the requirements under both legislation and regulationas to the disclosure of price sensitive information. You should avoid makingany statements that might risk breaching these requirements without prior clearancefrom the Secretary.

You will be bound by BT Group plc’s Articles of Associationand by the Company’s share dealing code.

**Briefings**

The Company has in place arrangements to complement the briefing material youhave already received about the BT group through an on-going programme to keepyou informed about the Company’s businesses, activities and developments,the communications industry and the regulatory environment. This includes meetingswith executive management in the Company and the Company’s external auditors.We will also arrange a tailored package of visits so you can see BT and its peopleat work.

**Review**

The performance of the Board and its committees is evaluated annually. If, inthe interim, there are any matters which cause you concern about your role youshould discuss them with the Chairman or the Secretary as soon as is appropriate.

**Insurance**

You are covered by the Company’s directors’ and officers’ liabilityinsurance. The current limit in respect of any one claim or all claims in aggregateduring the period of the insurance policy is £150 million.

**Independent professional advice**

The Company has a procedure for its directors, in furtherance of their duties,to take independent advice if necessary, at the Company’s expense. If youfeel it necessary to seek such advice, please contact the Secretary first. Acopy of the procedure was included in your briefing pack.

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**Termination**

Upon termination of your appointment you will at the Company’s request promptlyresign in writing as a director of BT Group pic. The Secretary is irrevocablyauthorised to sign a letter of resignation on your behalf if you fail to do so.

**Acceptance**

Please confirm your acceptance of these terms by signing and returning to LarryStone the attached copy of this letter.

Yours ever,

/s/ ChristopherBland 

Sir Christopher Bland

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|            |              |
|-----------------|-------------------|
| To:   | Larry Stone       |
|            | Company Secretary |

I confirm acceptance of my appointment on the above terms.

| /s/ Phil        Hodkinson |  | 11/1/06 |   |
|--------------------------------|--|---------|--------|
|                                |  |         |   |
| Name                           |  | Date    |   |

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