UPDATE 2-Vodafone Qatar to test market with $929 mln IPO

* First IPO in more than a year in the Gulf state

* Company plans to sell 338.1 mln shares at 10 riyals each

(Adds CFO interview)

By Dania Saadi and John Irish

DUBAI, March 15 (Reuters) - The Qatari unit of Vodafone Group Plc (VOD.L) is seeking 3.38 billion riyals ($928.6 million) in an April share sale, the first in more than a year in the Gulf state, the company's chief financial officer said.

The company plans to sell 338.1 million shares at 10 riyals each staring on April 12 and to list its shares on the Doha bourse by June, John Tombleson told Reuters in an interview on Sunday.

The company, which has broken the monopoly of state-controlled Qatar Telecommunications Co (QTEL.QA), will sell a 40 percent stake in the IPO, which runs until April 26.

"It (the IPO market) has obviously gotten a lot of scrutiny from us, but we believe there will be strong demand," Tombleson said. "There are few markets in the world where there is a telecom monopoly at present."

Appetite for IPOs, once a favoured tool to raise capital in the Gulf, slumped in the second half of 2008 as investors reacted to the global economic crisis.

Vodafone had planned to sell the stake in the operator in October but did not receive the required approvals from the Qatar Financial Markets Authority (QFMA) due to difficult market conditions.

FINANCING RESTRICTIONS

Vodafone Qatar, which expects to launch its services to the public in May and June, is targeting a 33 percent market share in three years, Tombleson said.

The company turned on its mobile network on March 1 and its first 1,000 customers have been asked to help test the network, he said.

"Theoretically it is a good investment and there is potential for (the new operator) to get market share, but the problem is the institutions," said Samer al-Jaouni, general manager at Middle East Financial Brokerage.

"Will they be able to finance such an IPO? We may not see as much interest as in the past due to financing restrictions (investors are facing)."