We need to allow users to check-out check-in files in Windows Explorer.
Is it mandatory to install Visual Studio in order to use Team Explorer or TFS Power Tools?
What kind of licenses will be needed?
yes there is a way you can install team explorer which doesn’t require any kind visual studio license.
Check this: https://blogs.msdn.microsoft.com/devops/2017/04/05/reintroducing-the-team-explorer-standalone-installer/
Through this, you can install the tfs power tools to get windows explorer that allows source control operations.
Note: if you are using azure-devops then you will get 5 users for free. On-premise tfs you still need to pay.