Web pages load at a crawling pace. Video streams glitch and freeze. Outside Bolivia’s biggest cities, the nearest internet signal is sometimes hours away over treacherous mountain roads.

So when Elon Musk’s Starlink offered Bolivia fast, affordable internet beamed from space, many expected the Andean nation of 12 million to celebrate. Instead, Bolivia said no thanks.

Starlink, the satellite internet service from Mr. Musk’s private space company, SpaceX, has made remarkable strides in South America, spreading to almost every country and bringing high-speed internet to the region’s most far-flung corners, even reaching isolated Indigenous people living deep in the Amazon rainforest.

But Starlink’s advance has been stymied by Bolivia, which refused to give it an operating license last year, with experts and officials citing worries over its unchecked dominance everywhere it has set up shop, instead choosing to rely on the country’s own aging Chinese-made satellite.

The decision to reject Starlink has puzzled and angered people in Bolivia, where internet speeds are the slowest in South America and hundreds of thousands remain offline. Without an internet connection, people often struggle to get an education and lack access to jobs and fast help during natural disasters.