Anti-competitive behavior of the incumbent players, Telecom New Zealand, and Telstra Clear, is the largest potential threat to Araneo. Although neither currently have or are developing competitive products, a move to install en-masse off the shelf outdoor wireless equipment regardless of demand, and subseqent pricing below cost of delivery, is the worst case scenerio. While such behaviour would be illegal, it would be difficult to prove and potentially devestating to the business. The introduction of new wholesale DSL products for business, while not anticompetitive, and not at all likely, will also likely impact the demand for Araneo wireless broadband. Both Telecom and Telstra have the engineering staff necessary to compete.

Entry of a second lines company into the wireless market is another possible threat. Counties Power has not fared well with their investment in Wired Country, but likely realize that a large-infrastructure based entry such as theirs might not turn a profit for a decade or more. It is somewhat likely that Vector Networks will choose to pursue wireless in the next few years, but not until completion of their merger. Vector has a history of attempting to enter the communications market and provides some microwave links in order to extend the reach of their buried fibre network. Vector has a small network staff and would have to outsource or staff up in order to enter the market.

Bundled products from ISPs who decide to launch their own wireless networks are another threat. Recently Compass Communications, a second-tier telecommunications company who provide lines and calling plans, have rolled out wireless access in ten metropolitan areas. Their plans are somewhat competitive with JetStream (Telecom DSL) and are aimed at business customers only. Compass have purchased off the shelf unlicensed-band technology from Trango, and are relying on contract help for network deployment and maintenance. Many other ISPs are purchasing off the shelf systems in 2.4 and 5.8 Ghz ranges for trial or full implementation, relying on in-house or vendor support. These systems are plug-and-play, and require little knowledge to operate, but are prone to issues with interference which will limit small player's ability to expand.

Expansion of the wireless offerings by BCL, the state enterprise which provides broadcast services to radio and television in New Zealand, and tower space to many telecommunications providers, could impact Araneo. BCL currently offer a rural wireless access solution based on licensed frequencies and technology purchased from Airspan. Their offering is equivalent to low-end DSL, and so, at roughly 40x slower than Araneo, is not a competitive product. If they choose to enter this market, they will have to outsource implementation or staff up quickly, as they currently do not have the expertise in-house to pursue such a venture.