Dish Network executives have routinely cited Japan's Rakuten as blazing a path that Dish will eventually follow when it begins to construct its planned 5G network. But that could also spell trouble for Dish.

Rakuten, Dish executives point out, is building a shiny, new wireless network that will make use of the latest technologies, ranging from software virtualization to open radio access network (RAN) designs. That, Rakuten executives have boasted, will result in a 40% reduction in the cost of managing the company's network when compared with the costs of managing existing, established mobile networks.

Dish is clearly rooting for Rakuten, in the hopes that it can follow the company's playbook in mobile.

"Rakuten is important in the sense that we've learned a lot from them, but they're really the first company to start embracing kind of an O-RAN open architecture system, and it's been pretty incredible the amount of progress they made in 18 months since we first announced what they were going to do," Dish Network Chairman Charlie Ergen said in February during his company's most recent quarterly conference call with investors, according to a Seeking Alpha transcript of the event. "We learned a lot from them."

Ergen added though that Dish may only copy some elements of Rakuten's strategy, and that Dish will also benefit from the most recent developments in the 5G marketplace considering it hasn't started its buildout yet.

"It's always a little easier to be the second person, not the first person," Ergen said. "They're going to get a lot more arrows in the back than hopefully we will."

Indeed, a new Wall Street analyst report indicates that the reality of Rakuten's service doesn't quite live up to the company's initial promises, and investors' hopes.

Virtual RAN (vRAN) is "not generating the cost disruption expected," wrote the analysts with New Street Research in a recent note to investors.

The analysts specifically pointed to Rakuten's newly announced mobile pricing – they noted that, although it initially appears cheaper than the service plans from Japan's established mobile providers, that gap mostly disappears when Rakuten customers take into account additional costs around data roaming and international calls.

"This is a far cry from the disruption promised by [Rakuten] CEO Hiroshi Mikitani at MWC just over a year ago," the analysts wrote.

Part of the reason for the discrepancy, the analysts argued, is that Rakuten's virtualized, open RAN network has proven more difficult to build than expected. "While macro cell build is back on track we think, the company is far behind their initial target of 100k micro cells at launch," the analysts wrote. "This means their own network capacity is lagging their initial plan."

The New Street analysts explained that Rakuten still has an opportunity to cut into the mobile market with an upstart offering, and that it could still reach its lofty growth targets. But, they noted, the company's initial foray hasn't lived up to the sky-high hype built up around its efforts. "As we expected, vRAN works and we still see Rakuten creating value through its mobile entry, but the risk of Rakuten proving unable to provide a service at a low enough price that gains material numbers of customers is rising," the analysts wrote.

Dish, for its part, is at the very start of the same kind of journey that Rakuten is engaged in. Like Rakuten, it's building a wireless network from scratch. Like Rakuten, it hopes to use new network technologies to do so at a fraction of the cost of its bigger rivals. And like Rakuten, Dish hopes to begin its efforts in the mobile industry first as an MVNO and later as a network operator.

But there are plenty of differences as well. Dish's core business of satellite TV is dramatically different from Rakuten's core business of online commerce. And Dish's vast spectrum holdings earmarked for a pure-play 5G network dwarf the 40MHz of spectrum Rakuten is using to launch 4G (Rakuten has promised 5G service later this year).

Dish has already set aside $250 million to $500 million this year for its 5G buildout – which remains contingent on Sprint and T-Mobile closing their proposed merger. The companies hope to do so by April 1. But Dish continues to maintain that it will spend only $10 billion to build its 5G network across the US – that's less than what giant operators like AT&T and Verizon spend to maintain their existing networks in one year.

Many analysts remain skeptical that Dish will be able to reach its 5G buildout goals within its expectations – not to mention compete with heavyweights like AT&T and Verizon in 5G.

"There are clearly those who believe Dish will be able to build a virtualized 5G network for their $10B, as they have estimated," wrote the Wall Street analysts with MoffettNathanson in a recent note to investors. "We are not among them."

After all, Rakuten said it expects to spend around $5.4 billion constructing its 4G network and another $1.8 billion upgrading to 5G – and Japan is far smaller than the US in terms of geography and population. Moreover, the analysts at MoffettNathanson wrote that equipment is only 20% or so of the cost of building a network. The remainder – labor, tower leases, powering, zoning and siting, and backhaul – doesn't benefit from virtualization or open RAN.

If Rakuten's progress in mobile so far is any indication, Dish will face plenty of obstacles if it does begin walking down the 5G path.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano