Mobile phone has diverse usages to different users in accordance with their necessities. With dramatic increase in mobile phone usage in recent years, people take into account various factors while they decide purchasing a mobile phone. This study has put efforts to uncover the underlying factors those affect customers in choosing mobile phone. Data were collected from those people live in Khulna city maintaining equal ratios of various groups like male, female, businessmen, employees, students and others (mostly housewives). To select desired respondents, convenient sampling method was used. A structured questionnaire designed based on previous study with five point Likert scale was used to interview respondents. Factor analysis was applied to extract the underlying factors affect mobile phone purchasing decision. The results show that the most important factor is physical attributes. Some other factors are pricing, charging and operating facilities, size and weight, friends’ and colleagues’ recommendations, neighbors’ recommendations and advertising