UPDATE 1-Vodafone Qatar reports flat year-on-year loss for Q1

* Q1 net loss 99.6 mln riyals, flat y-o-y - statement

* Reduced staffing by 10 pct in May

* Mobile customers up 2.6 pct, revenue down 7 pct (Adds detail, context)

By David French

DUBAI, July 26 (Reuters) - Vodafone Qatar, anaffiliate of Vodafone Group, reported on Tuesday afirst-quarter loss that was flat compared with the correspondingperiod of last year, as higher customer numbers offset a declinein total revenue

The telecoms operator made a net loss of 99.6 million riyals($27.4 million) in the three months to June 30, it said in abourse statement, compared with a loss of 99.9 million riyals inthe prior-year period.

The result was in line with the forecast of QNB FinancialServices, which expected a net loss of 101.2 million riyals.

Vodafone Qatar, whose financial year starts on April 1, hasyet to make a quarterly net profit since ending state-controlledOoredoo's domestic monopoly in 2009.

The flat year-on-year result comes after the firm's losseshad widened in the previous six quarters as Ooredoo slashedprices and fought hard to bolster its revenue share.

In the statement, Vodafone Qatar Chief Executive Ian Graysaid the operator had reduced headcount by 10 percent in May,with some job cuts permanent and other positions to bereassigned to roles aimed at boosting mobile revenue streams.

It said when announcing its full-year earnings in May itplanned to cut its workforce by a tenth, although gave nodetails at the time.

Its first-quarter earnings were aided by a 2.6 percentincrease in mobile customers to 1.458 million. Mobile averagerevenue per user (ARPU), a key industry indicator, was up 2.1percent on the fourth quarter of its financial year, althoughdown 9 percent on the same quarter last year.

Vodafone Qatar generated total revenue of 501 million riyalsin its first quarter. This was down 7 percent from theprior-year period, the statement said.

Gray added that while international voice revenue continuedto decline, revenue from data usage was higher.

($1 = 3.6414 Qatar riyals) (Editing by Muralikumar Anantharaman and Mark Potter)