Huawei to open first flagship store outside China in Vienna

VIENNA (Reuters) - Huawei is to open a smartphone flagship store in Vienna, its first such outlet outside China, as part of a charm offensive in Europe where its future hangs in the balance.

The world's biggest producer of telecoms equipment is under scrutiny in the West over its relationship with the Chinese government and U.S.-led allegations of enabling state espionage, with Washington asking allies not to use Huawei's technology.

Huawei has repeatedly denied the allegations and did again at a news conference in Vienna on Thursday.

Joe Kelly, Vice President of Corporate Communications said at the news conference: "We have never been asked by any government or any authority anywhere in the world... to do anything that would compromise or jeopardise... the security of customer networks."

"If we ever are asked to do so, we will refuse," Kelly said.

Huawei has deals with all three major Austrian telecoms groups: A1 Telekom Austria, controlled by Mexico's America Movil, Deutsche Telekom's T-Mobile Austria and Hutchison Whampoa's Drei Austria.

The company is ready to help them build 5G infrastructure for the next generation mobile networks, the CEO of Huawei's Austrian business said.

"We are more than ready to support Austria on its way to becoming a 5G pioneer with our know how and our solutions," Pan Yao said.

Austria, a laggard in the European Union for fast broadband connections, wants to become a 5G pioneer in Europe. It is among the first in the European Union to auction the licences. Results of the 3.4 to 3.8 GHz band auction, which will mainly speed up data services in densely populated areas, are expected within weeks.

The allegations against Huawei have led several Western countries to restrict the company's access to their markets and the European Union to consider proposals that could amount to a de facto ban.

Austria's technology ministry on Thursday reaffirmed it was aiming for a European stance on whether or not to allow the Chinese firm to equip 5G networks.

"Our priority is to protect our networks," a spokesman for the technology ministry said, adding that he was not aware of concrete suspicions against Huawei.

Huawei, which says it is the second biggest smartphone seller in Austria with a market share of 28 percent, said it was considering whether to invest in research and development in the country but did not provide any details.

It plans to open its Vienna flagship store in the summer.

($1 = 0.8809 euros)

(Reporting by Kirsti Knolle. Editing by Jane Merriman)